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Oil Company Profits and High Gas Prices: Here We Go Again
Staff, The Oil Drum
A good bit of this story was originally posted on September 6, 2005, when the politicians first began talking about price gouging and windfall profits taxes after the price rise due to Katrina--and was put together by SuperG, Yankee, and one of our old contributors who was an industry "insider." Since we're back where we started, yet again (we also re-ran this post on April 25, 2006, I thought this post should resurface just one more time. (You can go back to the dated link above for the old comments.)

Oh, and one more thing, can I yet again state my call for a gas tax (that I know won't happen, but I need a catharsis), just one more time? I've been doing it for three years, why stop now? (even if some would argue that it could be a regressive tax). Cheers, PG.

There's been some grumbling in the media about how Big Oil is gouging the public by charging record prices for gas while they reap record profits and "gouge" consumers. No one can dispute that oil companies are doing really well. And certainly no one can dispute that gas prices are high. But is the connection as straightforward as it gets portrayed in the media? If the oil companies were less greedy, would we see lower prices as the pump?
(22 May 2007)

Impact of rising gas prices 'fairly limited', economists say
Barbara Hagenbaugh, USA Today
Drivers may be griping about record high gasoline costs, but the recent surge in the price at the pump will have little impact on most consumers and will be hardly noticed in the broad economy, say several economists, including those at Standard & Poor's, LaSalle Bank and the Federal Reserve Bank of Dallas.

Rising incomes will help offset higher gas prices for most Americans, they say. And although gas prices are at unprecedented levels, not adjusted for inflation, the price gains have come over a number of years, giving consumers time to adjust their budgets.

"It's going to slow things down ... but luckily, consumers' pocketbooks are doing reasonably well," Standard & Poor's chief economist David Wyss says. "Some people are going to get hurt by this. But the overall impact on the economy is going to be fairly limited."

Low-income households that are already stretched thin are likely struggling to pay their higher gasoline bills, Wyss says.

The nationwide average price of a gallon of regular gasoline was $3.209 Tuesday, up more than a penny from Monday and 32 cents higher than a year ago, according to motor club AAA.

The average price at the pump is approaching the all-time high even when adjusting for inflation. The inflation-adjusted record was set in March 1981 at $3.223 in today's dollars, according to the Energy Department.
(22 May 2007)

API Conference Call on Gas Prices
Robert Rapier, The Oil Drum
On May 16th, I participated in another conference call with the American Petroleum Institute. The subject was gas prices. ... I will pull out some excerpts of our questions, but you can read the entire transcript here. I am told that they had some recording difficulties, so there will be no audio posted.
(23 May 2007)
Related from Byron King (who was in the conference call):
Man-in-the-street reporter bumps into "Peak Oil Man".

Record Gas Prices - Are you feeling gouged?
Moveon.org via "All About Indianapolis"
As of yesterday, gas prices are the highest in U.S. history—we just passed the 1981 record, even adjusted for inflation (1). Prices could reach $4.00 per gallon in parts of the country, just in time to crimp summer vacation plans. As consumers suffer, the oil industry continues to reap the windfall—breaking profit records on an almost quarterly basis.

It's outrageous! Enough is enough. Hearings start today on H.R. 1252, a House bill that would make gas price gouging a federal crime, punishable by 10 years in prison. Speaker Pelosi has said she'll move the bill to a vote this week— there's the two-thirds majority required to fast track the bill through the process. (2)

Oil company lobbyists are frantically trying to stop the bill. Your representative needs to hear from you today. "Gasoline price gouging should be made a federal crime before the summer price increases hurt more American families.Rep Bart Stupak (D-MI), sponsor of the House bill said this of his motivation to introduce the legislation: "In April ... crude oil was $7 a barrel cheaper than last year (but) gas prices were almost 50 cents a gallon higher. Clearly there's more at play than simply the world crude oil market." (3)

In April, more than two-thirds of Americans reported that their gas bills were causing financial crunches, with a full third saying it was having a "serious" impact on their families. (4)

That same month, the top two US companies, Exxon-Mobil and Chevron-Texaco, announced a combined $14 billion in first quarter profits. (5)

It seems like even the oil industry has gone too far this time, and it's time to balance the scales. The Senate passed a price-gouging measure out of committee last week, and the House bill now has over 100 co-sponsors from both sides of the aisle.

The oil industry is nervous. They've sent their lobbyists to the Hill in full force to stop—or at least weaken—these bills, and they're pulling out all the stops. The American Petroleum Institute, an industry front group of more than 400 oil and gas companies, even threatened that new laws could increase gas prices more. (6)

Enough is enough. This summer, we can stop Big Oil from profiting at the expense of American families. Can you sign the petition to ask your representative to make gasoline a price gouging a federal crime now?

Sign the petition:
http://pol.moveon.org/stoppricegouging/?rc=oil_petition&id=10387-6330836-PS4iKQ&t=5

Don't forget to pass this on to your friends and family - this week is an historic opportunity to send Big Oil a message that we've had enough.

Sources:
1. "U.S. gas prices jump more than 11 cents," Atlanta Journal-Constitution, May 21, 2007 www.moveon.org/r?r=2595&id=10386-5269734-Vb7e9B&t=5

2. "Debate on [H.R. 1252], offered by Energy and Commerce Oversight and Investigations Subcommittee Chairman Bart Stupak, D-Mich., will kick off Tuesday with a hearing in Stupak's subcommittee. It is possible that an Energy and Commerce markup will follow. But Democratic leaders might opt to bring the bill up to the floor under suspension of House rules by Wednesday." Excerpted from National Journal's Congress Daily, Monday, May 21, 2007

3. "Lawmaker Links Gas Prices to Investments," Houston Chronicle, May 16, 2007 www.chron.com/disp/story.mpl/ap/fn/4810598.html

4. "As Gas Prices Rise Again, Democrats Blame Big Oil," Washington Post, May 11, 2007 www.moveon.org/r?r=2591&id=10386-5269734-Vb7e9B&t=6

5. "Lawmaker Links Gas Prices to Investments," Houston Chronicle, May 16, 2007 www.chron.com/disp/story.mpl/ap/fn/4810598.html

6. "Lawmakers' blood pressure rises with prices at the pump," TheHill.com, May 17, 2007 www.moveon.org/r?r=2586&id=10386-5269734-Vb7e9B&t=7
(22 May 2007)
Looks like we are encountering one of the issues on which the mainstream liberal-left differs from peak oil people. The mainstream liberal-left emphasizes the villainy of the oil companies. Peak oil people say that we are just beginning to see the effects of peak oil; that this is a false issue.

Personally, I think the peak oil crowd is largely right on this one, not because the oil companies are angels. I just don't see how companies have that much control over the market. I suspect that with peak oil, we will have a series of scapegoats: oil companies for the left, environmentalists for the right, OPEC for left and right. -BA

House passes gasoline gouging bill
Richard Simon, LA Times
Congress is desperate to show it feels your pain at the pump.

The House today voted, 284-141, to pass a bill that would make gasoline price gouging a federal offense.

In the Senate, Democratic leaders were scrambling to introduce a new energy bill, the first since they took control of Congress. A committee also held a hearing on whether oil industry mergers had contributed to higher fuel prices.

And the day before, members of both parties ignored a presidential veto threat and approved legislation that would subject the Organization of the Petroleum Exporting Countries to price-fixing lawsuits.

Record high gasoline prices have drivers grumbling nationwide. Members of Congress have particular cause for alarm as they prepare to recess for a week for Memorial Day, the traditional start of the summer driving season.
(23 May 2007)
UPDATE: Just added this item.