Energy and Commerce Committee Chairman Frank Pallone, Jr. (D-NJ) delivered the following remarks on the House floor today in support of H.R. 7688, the Consumer Fuel Price Gouging Prevention Act:
Madam Speaker, today the House is taking action to protect consumers at the gas pump. This legislation is necessary right now because Big Oil companies are ripping off the American people.
At a time when Americans are paying record high prices for gas, Big Oil is taking advantage of the instability caused by Russia’s unjust war in Ukraine and our ongoing economic recovery from the COVID-19 pandemic to rake in record profits. The largest four Big Oil companies collectively made $27 billion in profits during the first quarter of this year – some of these were record highs; others were the highest profits in over a decade. One CEO was so giddy about these profits that he said his company was, a quote, “cash machine.”
These companies are indeed cash machines. Last month, the Energy and Commerce Committee held a hearing with the leaders of six Big Oil companies. During that hearing, in questioning from me, all six Big Oil CEOs refused to scale down stock buybacks, making it abundantly clear that their sole interest is their profits even when it comes at the expense of the American people.
Instead of a traditional supply and demand economic model where we’d expect to see these companies ramping up production to meet rising demand, they are instead using their profits to buy back their own stock to further pad the pockets of their executives and shareholders.
If oil companies want to produce right now, nothing is standing in their way. The oil and gas industry has more than 9,000 approved but unused drilling permits that could be used for production today.
Instead, Big Oil companies are more interested in funneling billions to their shareholders and executives than in addressing record high gas prices. They are gouging consumers and manipulating the market by deliberately keeping production low, which keeps both prices and their profits high.
You don’t have to take my word for it – oil and gas executives themselves admitted as much. In a recent survey, 60 percent of executives cited investor pressure to maintain capital discipline as the primary reason they are not increasing production. Only 6 percent said government regulations are impeding oil production.
This profiteering must end, and that’s why the House must pass the Consumer Fuel Price Gouging Prevention Act. This legislation will put an end to price gouging, penalize market manipulators, and bring more transparency to the secretive oil and gas market. I thank Representatives Schrier and Porter for their leadership on this important legislation.
It grants the president the power to declare an ‘energy emergency proclamation’ and makes it illegal to sell consumer fuels at an excessive and exploitative price during an energy emergency. The Federal Trade Commission (FTC) would then be empowered to go after fuel wholesalers and retailers for price gouging. It also empowers state attorneys general, including in the U.S. territories and the District of Columbia, to enforce against price gouging at the retail level.
The legislation also bolsters FTC’s ability to crack down on fuel market manipulation and doubles the maximum penalty for manipulating wholesale oil markets to up to $2 million a day for each violation.
It also includes provisions that would improve market transparency and competition, which is so important since a large portion of the oil and gas pricing is done in the dark. We need to shed some light on how these prices are reached so that we can hold these companies accountable.
Madam Speaker, it is time we stop Big Oil from ripping off the American people. Let’s help lower gas prices at the pump by passing the Consumer Fuel Price Gouging Prevention Act today.
And with that I reserve the balance of my time.