Senator calls for gasoline price-fix probe

Looks like we're going to have some fun with gas prices. Today, I posted a story where President Bush was concerned about the high gas prices, and that the White House would be watching for price-gouging from Big Oil. Okay, so we both know that Bush was playing the PR-spin on an issue that Americans are concerned about. Well, now we've got this new story from CNN.Com:

NEW YORK (CNNMoney.com) - As American drivers shell out more and more money at the pump with each passing day, some are asking whether big oil companies are scheming to withhold supplies in order to boost prices.

New York Senator Charles Schumer, speaking in front of a Hess station in Manhattan, called Tuesday for a federal investigation to see if oil companies and refiners are deliberately withholding gasoline production, taking advantage of the normal switch from winter gas to summer gas in an attempt to bid up prices.

"The bottom line is they are producing at 85 percent capacity when they should be producing over 90 percent," said Schumer. "Are they scaling back production? Only by subpoenaing the companies and looking in their books will we get that answer."

Schumer's call comes as oil prices broke record highs and gasoline prices trailed close behind.

The average price of a gallon of regular gasoline reached $2.79 Tuesday, just 26 cents shy of its all time high of $3.05, which was reached last August in the wake of Hurricane Katrina, according to AAA (formerly known as the American Automobile Association).

And the summer driving season is just beginning, which could mean Americans will end up paying even higher prices by June or July.

Already, Americans on a whole are spending $212 million more per day on gasoline than they spent last year, and $522 million more per day than they spent in 2002, according to the Oil Price Information Service, publisher of an industry newsletter.

A spokesman for The Federal Trade Commission, which is the agency that would look into Schumer's request, said it will take the senator's letter seriously and will respond appropriately, although the spokesman couldn't give a timeline or any other information because the agency had yet to review the letter.

However, the FTC spokesman did point out that two previous investigations into unfair business practices by the oil industry conducted in 2000 and 2001 turned up no evidence of wrongdoing.

Results of another investigation, centered around price fixing in the wake of Hurricane Katrina, are expected next month.

I guess I should be happy that New York senator Charles Schumer is also going to be on the lookout for price-gouging, when the gas prices start shooting up in the next couple of months. Of course I'm not. Gas prices will certainly go up again, Americans will bitch and moan as they fill up their SUVs, and we'll hear more gas coming from the politicians mouths rather than from their behinds. America is addicted to oil. Big Oil knows it, and they know they can get away with price-gouging the American consumers. President Bush knows it, which is why we've got the PNAC neocons sending American troops into Iraq, and possibly soon to Iran, so they can secure the Middle East oil for Big Oil's windfall profits. And Charles Schumer knows it, since he's calling for the same congressional investigations right before the summer driving session during a midterm election year.

There are no easy solutions to this problem. Having a Democratic Congress impose windfall profits tax on Big Oil companies isn't going to solve this problem any more than having Big Oil happily drill into ANWAR. We need to develop a whole series of new strategies in forcing American companies and consumers to be more energy efficient--and develop both incentives and penalties to adopt energy efficiency. We need to make it easier and cheaper for Americans to replace inefficient appliances, improve insulation of their homes, and help wean them from their gas guzzling SUVs. We need to force American car makers to become more energy efficient through raising CAFE standards on all vehicles, and provide research credits in investing in new technologies. We need to improve our public transportation system. We need to develop new strategies where all American homes and business become both producers and consumers of energy (How about solar energy for powering heating and cooling, where excessive energy generated from the solar panels can be sent out through the electric grid). I can't say what the answers to our energy problems are. But the federal government has got to take the lead in finding new solutions and new technologies in solving our energy addiction. The government has to find a way to release the creative energies and ingenuity of the American people to solve this crisis.