SYRACUSE, N.Y. -- If gasoline prices do not fall back to where they were before Hurricane Katrina, Senator Charles Schumer (D-N.Y.) might propose breaking up oil corporations in the United States until there are 10 or 15 companies, reported The Post-Standard.
If we do nothing, we may wish for the days of $2.89 gas, Schumer said Tuesday during a news conference at the Carrier Circle Mobil station in Syracuse, N.Y.
Schumer was in Syracuse to call for a temporary levy on oil companies' windfall profits to help pay for Katrina relief. [image-nocss] He said the levy would amount to 50% of the profits the big oil companies are going to make this year because of the high price of oil.
His proposal was introduced as the REPAIR ActRecapture Excess Profits & Invest in Relief, said the report.
By Schumer's calculations, the largest oil conglomerates might reap $80 billion in windfall profits. If we took half of that, $40 billion, that could go to Katrina relief, and that would be money taxpayers wouldn't have to pay, he said. Oil companies who are making excessive profits because of Katrina, and perhaps Rita, should, at the very least, shoulder a share of the burden with taxpayers.
Oh his website, Schumer introduced what he called a gouge watch (http://schumer.senate.gov/SchumerWebsite/GOUGE_WATCH/index.html ) to allow motorists to report dramatic increases in the price of gasoline. His site will link complaints directly to the Federal Trade Commission (FTC). Schumer has asked the FTC to investigate whether oil companies and gas stations are operating ethically, and he called for formation of a task force to identify cases of oil and gasoline price gouging across the country.
Proposing the forced breakup of big oil companies would be a last resort, Schumer said, but it is a step he will take if prices don't come down.
Meanwhile, Senator Dick Durbin (D-Ill.) also proposed the new tax on oil companies' excessive profits Tuesday, saying the money could help consumers cope with the high cost of gasoline and heating oil, according to an Associated Press report.
He said refineries have seen their profits soar 255% over the past year, and that high fuel costs threaten the economy and hurt working families. Every dollar that you're paying at that gas pump is going into more profits for the oil companiesdramatically higher profits than they have ever seen, he said at a news conference.
The tax money could be used to give consumers a $150 rebate, help poor families pay their home heating bills and provide $1 billion in incentives for auto companies to improve fuel efficiency, he said.
And in a letter to President Bush, Durbin joined his colleagues in urging the president to convene immediately a summit at the White House of oil and gas company CEOs to call on them to be good corporate citizens by reducing their prices.
Durbin said that Illinoisans can expect to continue to see their energy costs rise unless the President takes bold and decisive action. Durbin warned that unless consumers in Illinois see a reduction in the price of gasoline, they could pay an additional $6 billion this year alone.
In times of national crisis, corporations have been called upon to act in the national interest, the Senators wrote in a letter organized by U.S. Senator Barbara Mikulski (D-Md.). In 1962, as our country faced an economic crisis at home and foreign policy crises abroad from Berlin to Vietnam, the steel industry jacked up prices. President Kennedy called the CEOs of the steel industry to the White House. He forcefully made the case for the American people: he said the steel industry action was wholly unjustified and an irresponsible defiance of the public interest.' President Kennedy publicly pressed them hardand prices decreased. We urge you to follow President Kennedy's example.
Reminding the President of his close ties to the oil and gas industries, the Senators continued, We have never before had a President, Vice President or Administration as close to the oil, gas and energy industry as yours is. This was demonstrated when, at the beginning of your administration, you convened a White House energy task force to draft a national energy policy. As we now know, large parts of that policy were drafted by your friends, allies and supporters in the oil, gas and energy industries.
Mr. President, if you can call on the oil, gas and energy industries to write national policy that benefits them, then you can certainly call them to the White House on behalf of the American people at this time of national need. America needs your leadership to prevail upon them to reduce gas prices and other fuel prices now, the Senators concluded.
Schumer and Durbin recently introduced legislationthe Strategic Gasoline & Fuel Reserve Act of 2005to create a national strategic gasoline and jet fuel reserve to be drawn upon in times of fuel shortages. The Strategic Petroleum Reserve (SPR) provides crude oil supply in times of shortage or economic burden; a Strategic Gasoline & Fuel Reserve would provide the much needed refined product.
Schumer said, The bottom line is: new gasoline and jet fuel reserves will put the brakes on speeding gas prices in a crunch. It behooves the federal government to do more than rely on the goodwill of our European allies for desperately needed gasoline and jet fuel in times of serious disasters. Our strategic oil reserve serves a very important purposeit bolsters crude oil supplies when they are low and it can significantly reduce prices at the gas pump when deployed.
He added, We created the [SPR] decades ago because we knew we needed to put oil away for a rainy-day. But now, with the energy markets stretched to the max, Hurricanes Rita and Katrina wreaking havoc with our Gulf refiners, and greedy oil companies jacking up prices at the pumpwe need to create rainy day reserves for gasoline and jet fuelthe products that propel our economy. But, at times when our refining capacity is disrupted and gasoline and jet fuel prices spike, we must have an additional reserve of refined oil to inject into our gasoline and jet fuel markets to shore up supply and stabilize prices.
The Strategic Gasoline & Fuel Reserve Act of 2005 would:
Establish a 47.5 million barrel strategic fuel reserve comprised of no more than 40 million barrels of unleaded gasoline and 7.5 million barrels of jet fuel. The reserve would be located at no less than three, and no more than five, strategically significant regional locations throughout the U.S. to be determined by the Secretary of Energy; Require the Secretary of Energy to work with the Secretary of Homeland Security, to determine the most appropriate physical design and security measures for the reserve; Provide the president with the authority to release gasoline or jet fuel from the reserve upon finding that a shortage in supply will cause adverse economic consequences; Provide governors the ability to request release of gasoline or fuel from the reserve should there be a supply issue in the governor's state. The Secretary of Energy is authorized to make a determination of the findings presented by the governor; Provides authority to the president to temporarily suspend filling the reserve; however, the bill requires that the president seek congressional approval to extend the fill completion date beyond the March 2008 deadline determined by the act. Requires the secretary to report to Congress and the president a plan for filling, managing and disposing of gasoline reserves. The report would also include an estimated cost of reserve. The secretary must also include in the report efforts that the Department of Energy will take to minimize the potential need for release from the reserve. Requires that the reserve would be operational no later than two years after enactment of the act.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.