Sanders pushes for gas price reprieve
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By Bruce Edwards Rutland Herald Staff - Published: April 20, 2006
Since Friday, the price of regular gasoline at the Stewart's Shops store on West Street in Rutland has jumped 10 cents to $2.82 a gallon on Wednesday.
It's not only consumers who are fuming at the skyrocketing prices that are expected to go even higher as the peak summer driving season approaches. Fed up with what he calls price-gouging by the major oil companies, Rep. Bernard Sanders, I-Vt., on Wednesday called on President Bush to convene an emergency energy summit of congressional leaders, oil industry executives and consumer advocates to address the soaring price of gasoline.
Sanders said the summit would implement solutions to immediately reduce the price of gasoline at the pump, reduce the country's dependence on fossil fuels and prohibit price gouging.
An industry trade group took a dim view of Sanders' proposal, saying it could hurt rather than help consumers.
Sanders requested the summit in a letter to Bush along with Rep. Peter DeFazio, D-Ore. In the coming weeks, Sanders said he and DeFazio will work with other members of Congress to garner additional support for the summit.
"The price of gas is skyrocketing and this is having huge impact on the income of people," Sanders said Wednesday. "If you're a worker who is traveling 100 miles to and from work, you're paying on average an extra $1,000 a year more for gas than you were when gas was a $1 a gallon lower."
He said the higher prices have had a detrimental effect on the economy including the trucking and airline industries and agriculture.
In his letter to Bush, Sanders said consumers should be seeing lower not higher prices at the pump.
"At more than $70 a barrel, oil prices are nearly as high today as they were during the height of Hurricane Katrina, even though oil inventories in the U.S. are at their highest levels in eight years," Sanders wrote.
"In fact, the last time that oil inventories were this high, the price of oil plunged below $11 a barrel," he added. "There is no good reason for gas prices to be this high, especially when oil companies continue to receive record-breaking profits, OPEC continues to receive increased revenue and oil executives continue to receive obscene levels of compensation."
In particular, Sanders took Exxon-Mobil to task for paying its retiring CEO a retirement package of $398 million.
"The idea that Americans are forced to pay sky-high gas prices so that Exxon-Mobil's CEO can rake in hundreds of millions of dollars for his retirement is absolutely unacceptable," he said.
At the same time he was calling for an energy summit, Sanders also called on Bush to publicly urge the oil companies to lower prices.
"It seems to me, that especially given the fact that you have a president and a vice president who come from the oil industry, that it would be a very positive thing if they stood up and told the oil industry to stop ripping off the American people," he said.
The proposed summit would focus on the following:
Sanders also has sponsored legislation with DeFazio that would stop major oil companies from making huge windfall profits, confront OPEC about lowering crude oil prices and increase the average fuel economy standards for cars to 45 miles per gallon and SUVs to 34 miles per gallon over the next decade.
Sanders' proposal got a chilly response from the American Petroleum Institute, particularly the idea of a windfall profits tax and the elimination of royalty tax breaks.
"The immediate term solutions the congressman is suggesting are mostly market interfering things that don't address the supply and demand tightness issues in the market place and could actually contribute to increase and not decrease prices," said Sara Banaszak, a spokeswoman for the American Petroleum Institute.
According to Banaszak, the oil industry underperformed the Standard & Poors during both the late-1980s and late-1990s and the "industry wasn't recognized for their investments" during that period. She said a windfall profits tax would hurt investment in future oil drilling and exploration.
As far as Sanders' accusation that the industry is making obscene profits, Banaszak said that oil and gas industries currently are making about 8 cents on the dollar and over the long term their profits are slightly above average.
She also said the major oil companies control very little of the world's crude oil supply with most of the world's crude controlled by government-controlled oil companies.
"The greatest driver in the price of gasoline at the pump is crude oil and about 59 percent … is just acquiring the crude and that's according to the Department of Energy," she said.
She said consumers can lower their gasoline bills by driving smarter: keeping tires properly inflated, remove excess weight from the vehicle and not driving aggressively.
Contact Bruce Edwards at bruce.edwards@rutlanderald.com.
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