Joe Lieberman: Did Someone Say “High Gas Prices”?

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How obsessed is Washington with gas prices? Acting on a Streetsblog post from last week, a reader wrote Connecticut Senator Joe Lieberman urging him to support legislation that would bolster funding for Amtrak. In response, Lieberman’s office sent a long, long form letter outlining the many ways the senator is — you guessed it — working to keep gasoline as accessible as possible.

Thank you for contacting me regarding high oil and gasoline prices. I
fully share your concerns; and I am working to alleviate the pain at
the pump on several fronts through a number of legislative measures
that are intended to ease gas prices, increase oversight of energy
markets, prevent price gouging, increase fuel efficiency and vehicle
fuel economy standards, reduce America’s dependence on foreign sources
of oil, and increase tax benefits for renewable energy and conservation.

Lieberman then goes on and on about record oil company profits, "exploitative pricing" and reducing dependence on foreign oil, and also proclaims his support for diverting from the national reserve. As for transportation, it’s all about CAFE standards, alternative fuels and the gas tax "holiday" — measures which somehow dovetail with his efforts to mitigate climate change. There’s even a link for tracking gas prices. Non-automotive means of transport are never mentioned.

Guess with all the energy he’s devoting to making it easier to drive, Lieberman hasn’t found time to crank out a constituent letter that at least pays lip service to passenger rail.

Follow the jump for the full text.

Thank you for contacting me regarding high oil and gasoline prices. I fully share your concerns; and I am working to alleviate the pain at the pump on several fronts through a number of legislative measures that are intended to ease gas prices, increase oversight of energy markets, prevent price gouging, increase fuel efficiency and vehicle fuel economy standards, reduce America’s dependence on foreign sources of oil, and increase tax benefits for renewable energy and conservation.

As you well know, America’s drivers are paying exorbitant prices to fill their tanks; and the U.S. economy is beginning to suffer along with the country’s consumers. In the spring of 2007, gasoline prices surged over $3.00 per gallon, stayed near that level during the summer driving season, and, after a brief retreat, returned there at the beginning of 2008 and have been steadily climbing ever since then. The price of oil accounts for at least half the price that consumers pay for gasoline at the pump. Unfortunately, oil prices are volatile and rising over the long term. At the same time, consumption of gasoline has continued to rise above nine million barrels per day (mbd), setting a record high summer peak of over 9.7 mbd during 2007.

Meanwhile, oil companies are enjoying record profits, thanks, in no small part, to a conscious strategy on their part to reduce our country’s refining capacity. Overall, a large number of factors have combined to put pressure on gasoline prices, the fundamental reason being the shrinking margin between global oil demand and global oil supply. The increased world demand for crude oil and limited U.S. refinery capacity to supply gasoline to a growing national economy, combined with the war and continued violence in Iraq, has added to the atmosphere of uncertainty. Threats of supply disruption have also added pressure, particularly to the commodity futures markets.

Over the years, industry insiders have advised U.S. oil companies to reduce spare refining capacity as a way to boost profits. As one Chevron memo paraphrased the advice, "if the U.S. petroleum industry doesn’t reduce its refining capacity, it will never see any substantial increase in refining margins." The oil companies heeded the advice with a vengeance; by 2004, idle refining capacity in the United States was a third of what it had been ten years earlier. In May 2007, along with other members of the Connecticut delegation, I requested an investigation by the U.S. Government Accountability Office (GAO) into the possible role of refinery outages, planned and unplanned, on gasoline prices and refinery company profits.

Between 1999 and 2004, the profit margin of U.S. refiners increased 80 percent. The widening profit margin would stimulate new competitors to enter the domestic refining market, if only the market were competitive. Unfortunately, the federal government’s antitrust enforcers have stood by as oil companies have merged and merged again. Now the remaining behemoths are powerful enough to block new entrants. According to GAO, the increased market concentration caused by the mergers had led to higher wholesale gasoline prices.

In view of the important concerns you raised, I welcome this opportunity to bring you up to date on the many actions I have taken, both past and present, to address high oil and gas prices as outlined below:

  • Continued high gasoline prices have placed the energy issue at the forefront of legislative debate and led to a broad spectrum of proposed new legislation during this 110th Congress. For instance, after much debate, the Energy Independence and Security Act (CLEAN Energy Act; H.R. 6), which was passed by Congress, with my support, and signed into law by President Bush in December 2007 (P.L. 110-140), includes several forward-looking policies that I played a key role in advancing and which promise to enhance economic and national security and help end America’s crippling oil dependence. These include substantially reducing our reliance on a global oil market that is dominated by volatile, and even hostile, foreign governments; an increase in the Corporate Average Fuel Economy (CAFE) standards for automobiles and light trucks; and an increase in the requirement for the use of renewable fuel sources that have lower net greenhouse gas emissions, such as the use and development of cellulosic biofuels, electric vehicles, hybrid or plug-in electric cars, fuel cell powered cars, and advanced diesel, starting in 2016. 
  • On October 18, 2007, Senator John Warner (R-VA) and I introduced the Lieberman-Warner Climate Security Act (S. 2191), a new, bipartisan, economy-wide, cap-and-trade bill which contains a number of provisions also aimed at reducing dependence on foreign oil. In addition to addressing the problem of climate change, the bill also works to bring other, domestically produced fuels and technologies that do not use gasoline at all into the market to compete with gasoline and drive prices down.
  • We must reintroduce competition and crack down on exploitative pricing throughout the oil industry. To that end, Congress should pass legislation along the lines of Senator Maria Cantwell’s (D-WA) Clean Energy Development for a Growing Economy (Clean EDGE) Act, which I proudly cosponsored during the 109th Congress, in order to go after the oil industry’s anti-competitive practices. Provisions in the Clean EDGE Act would give the Federal Trade Commission new authority to prohibit anti-consumer practices in the oil industry; direct GAO to investigate the federal government’s response to consolidation in the oil industry; prohibit oil companies from withholding sales or diverting supplies with the intent of inflating prices; and outlaw excessive increases in the prices of petroleum products.
  • This Congress, I supported additional legislative efforts to increase oversight of energy markets by signing on as an original cosponsor of the Oil and Gas Traders Oversight Act (S. 577), bipartisan legislation introduced by Senator Dianne Feinstein (D-CA) to increase transparency and accountability for the electronic over-the-counter trading of energy commodities, such as oil, natural gas, coal, and electricity. Furthermore, I am a cosponsor of the Oil Industry Merger Antitrust Enforcement Act (S. 878), sponsored by Senators Herb Kohl (D-WI) and Arlen Specter (R-PA), to help restore competitive conditions to the oil refining industry. I also have sponsored past legislation that would impose a 50-percent tax on windfall profits from oil produced by integrated oil companies. The revenue generated by the tax would help low- and middle-income consumers who just came through a winter of soaring home heating costs and are now facing a summer of record-high gasoline prices. 
  • Moreover, I supported legislation, along with several of my Senate colleagues, that would immediately reduce upward pressure on the price of gasoline by suspending purchases of oil for the Strategic Petroleum Reserve (SPR).  The Strategic Petroleum Reserve Fill Suspension and Consumer Protection Act (S. 2598), introduced by Senator Bryon Dorgan (D-ND),  authorizes a one-year suspension from filling the SPR through royalty-in-kind transfers, direct purchase, or any other acquisition measure. At a time of historic high oil prices, a time-out from government oil purchase will ease pressures on the market and offer reduced prices to consumers.  This legislation provides the necessary signal to the market by not diverting oil to fill the SPR. Now is not the time to divert oil from the market when we are experiencing record oil prices, rising consumer energy costs and other economic burdens, an economic downturn, and a tightening of global oil supplies. 
  • Most recently, on April 17, 2008, I cosponsored legislation (S. 2890), introduced by Senator John McCain (R-AZ), to provide for a highway fuel tax holiday.  I am also supporting an amendment offered by Senators McCain and Jon Kyl (R-AZ) for a gas tax holiday that would waive the federal gasoline tax from Memorial Day to Labor Day. 
  • Ultimately, the only permanent solution to high fuel prices and to free ourselves from recurring fuel price spikes at the whim of volatile and even hostile oil-producing nations is to end our oil addiction. That means sharply decreasing the amount of oil that our vehicles use. The United States simply cannot drill its way out of this bind; and any amount of oil produced from new wells in the United States would just be a trickle in the global oil market. Thus, any domestic drilling would not have any appreciable effect on the price Americans pay on that market. To this end, I, along with Senators Evan Bayh (D-IN), Sam Brownback (R-KS), Norm Coleman (R-MN), and others, introduced bipartisan legislation aimed at breaking America’s dependence on oil. Through a variety of steps, our Dependence Reduction through Innovation in Vehicles and Energy (DRIVE Act; S. 339) would reduce U.S. oil use by seven million barrels per day in 20 years – more than twice what we import from the Middle East today.  To implement these savings, the DRIVE Act would set rising targets for manufacturers to produce flexible fuel, alternative fuel, hybrid, plug-in hybrid, and fuel cell vehicles; institute loan guarantees, grants, and tax credits to promote sales of those vehicles; mandate the development of fuel efficiency standards for heavy-duty vehicles; eliminate the current tax break for purchases of heavy sport utility vehicles (SUVs); require the federal government to improve the fuel efficiency of its vehicle fleets; institute a program for increasing the use of fuel-saving tires; and institute a series of other critical measures for increasing domestic production of ethanol fuel.

For more information on S. 339 and other energy security efforts I have authored and championed, please click on this link on my web site outlining my work on energy independence at: http://lieberman.senate.gov/issues/energyindependence.cfm.  To keep track of future actions on S. 339 and the other legislation referenced in this letter, you can go to the "Bill Tracking" service at http://lieberman.senate.gov/issues/resources.

Please be assured that I am committed to seeing these strong, common-sense measures passed into law during this 110th Congress. Also, to find what gasoline stations are charging in your area, please go to my home page at http://lieberman.senate.gov and click on the "Rising Gas Prices" link under "Connecticut Corner" on the left-hand side of the page.

Thank you again for sharing your views, concerns, and suggestions with me. I hope you will continue to visit my web site at http://lieberman.senate.gov for updated news about my work on behalf of Connecticut and the nation. Please contact me if you have any additional questions or comments about our work in Congress.

  • Larry Littlefield

    You know, there used to be a difference between the parties. Democrats would BS us with nonsense about oil company price gouging, and Republicans would BS us with nonsense about environmental regulations and gas taxes.

    Not anymore.

    It isn’t two parties. It is the bi-partisan representatives of the most selfish one-third of the most selfish generations in U.S. history.

  • KOB

    Our politicians are really on a roll today…

  • Jeffrey Hymen

    Clearly vice presidential material.

  • Mark Walker

    I’ll suppress the 2000 words I could have written in favor of a few quick observations: The main factor driving high gas prices is the worldwide flatlining of supply in the face of rising demand — in other words, peak oil. Oil companies stopped building new refineries because they know that there will be less and less need for refining capacity as the world’s oil supply depletes. Refiners, in fact, are currently taking the hit to keep gas prices as low as they are! And the vast majority of the world’s oil fields are not owned by U.S. oil companies — they’re owned by the Kingdom of Saudi Arabia and the governments of Mexico, Venezuela, Nigeria, etc.

    As a longtime pathological liar, Lieberman is even better at oil company bashing than his colleagues. Note, incidentally, the way they’re all checking their “conservative” credentials at the door, then loudly protesting conditions that grow directly out of free-market forces.

  • Josh

    “You know, there used to be a difference between the parties. Democrats would BS us with nonsense about oil company price gouging, and Republicans would BS us with nonsense about environmental regulations and gas taxes.”

    To be fair, party-swapping Lieberman isn’t the right guy to look at if you’re hoping to find differences between Democrats and Republicans.

  • Brad Aaron

    I should note that the Lieberman-Warner “Climate Security Act” could end up devoting some moneys to transit. The details are still unclear.

  • Sara

    The politicians are paid well and usually just fly and use the subways. They’re not the ones feeling the pain at th pump like the rest of Americans, half of whom are already having to cut back on seeing friends and family: http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20080527006417&newsLang=en

  • I find it both depressing (and disturbing) that Lieberman completely missed, well, not just the point but the *topic* of the constituent’s letter, which was funding for Amtrak. It shows with what little attention legislators (and their aides) are actually reading their constituents’ letters.

  • I would like to point out a post on the blog by AmericanGoy. He posted an interview of a leading economist that testified before congress recently regarding high gas prices.

    Those of you who are interested my find his article enlightening, even if you only read part of it:

    http://americangoy.blogspot.com/2008/05/so-why-are-gas-prices-rising.html

  • Hilary

    As if I didn’t have enough reason to despise Joe Lieberman, I watched “Recount” on HBO Sunday night and was reminded how he — as Gore’s running mate – helped the Baker team steal Florida for Bush by agreeing that all absentee ballots from military counties – regardless of postmark or signature – be counted. That man should be pickled.

  • Eric

    “I find it both depressing (and disturbing) that Lieberman completely missed, well, not just the point but the *topic* of the constituent’s letter, which was funding for Amtrak. It shows with what little attention legislators (and their aides) are actually reading their constituents’ letters.”

    Urbanis, the gasoline spiel was probably the closest thing topic-wise that they had laying around. Certainly, Lieberman and his staff were unprepared for a passenger rail- or transit-related question.

  • @Eric #11: Precisely. And I find that unacceptable behavior in an elected official who nominally represents me. At the very least, they can acknowledge the topic, even if they don’t have an answer, e.g., “I’m looking into the question of Amtrak funding; in the meantime, you may be interested in all that I’m doing to bring down the high price of oil and gas…”

  • Arthur M. Collins

    Dear Editor:

    I have a simple choice for Mr. Lieberman, and it won’t
    take 2,500 words. Either:

    a) Build 1,000 advanced technology nuclear reactors, for electricity and transportation fuel production, and
    energy independence, or:

    b) Provide 200,000 body bags, and some chump change
    of $100 trillion, for ‘blood for oil’ resource wars, for the foreseeable future.

    c) There is also a whole Solar System out there, with
    a million-fold the natural resources and real estate
    of earth, with plenty of places to save (for future
    use) our ‘nuclear waste’. There is also ‘Slingatron’
    (look it up on the Web) technology, for slinging
    nuclear waste, or anything else, into space, or in to
    the Sun. The last I heard, the Sun does not care if
    we dump some ‘nuclear’ in to it.

    d) I hesitate to mention, that after 20 years of going
    around in circles, perhaps we should come up with
    (ugh!) a ‘national energy strategy’ which works.
    After all, we did succeed at World War II, the Cold
    War, and going to the moon. Perhaps, just perhaps,
    the ‘energy problem’ is not beyond us. Think Big!?

    Regards, Art Collins
    Retired Aerospace & Nuclear Engineer.

  • I see that you guys are interested/involved in Public transportation. The Pitch newspaper out of Kansas City recently did a story on light rails and the options for public transportation in a city that has very little. Check it out and tell us what you think at http://www.pitch.com

  • Dave H.

    Let’s be clear: Joe Lieberman is not a Democrat anymore. He lost the party’s primary and Mr. Bipartisan now is great friends with Mr. Bush and his colleagues.

  • Michael Lewis

    FOREIGN WARS OR DOMESTIC OIL

    If the US Government spent a trillion dollars over 8 years on domestic oil production from known reserves in the Gulf of Mexico, the Continental Shelf and coal gasification instead of War in Iraq gas would be $2 a gallon or less. America could quit sending billions to countries that sponsor terrorism. And reducing our trade imbalance keeps jobs in America. Every billion of trade deficit costs 13,000 jobs. $400 billion for oil last year: do the math.

    America has 1/4th the coal on planet earth. South Africa is producing 300,000 barrels of gas and diesel a day from coal. And synthetic fuel from coal is cleaner burning than gas. And it can be produced cheaper than from $100+ a barrel crude oil.

    Harness your anger at the pump. Call you’re US Senators and demand domestic production in this decade. If you don’t raise your voice the oil companies and politicians will assume you are ready to pay even more.

  • Ian Turner

    Sara,

    Say what? The political class in New York most certainly does *not* take the subway, our mayor being a notable exception. They all have parking permits, and they all drive. That is one reason why city politicans have such a windshield perspective even when they nominally represent predominantly non driving constituencies.

  • jmc

    #13, that’s great. You should send that to him. I think Lieberman tends to like bloody wars though so I can be pretty sure of what option he’ll pick.

  • john

    Let’s BLAME speculators for the high price of oil! How silly…other countries (consumers) want their fair share of a commodity Americans use to control. Too bad Americans became so lazy and obese in their growing addictions to this valuable resource.

  • It’s too bad that it’s ordinary Americans who have to pay the price at the pump now that gas pricing are skyrocketing. But if not now, then when? In England a gallon of gas is ten dollars. Cheap gas is not a god-given right.

  • Most depressing part of the letter:

    Ultimately, the only permanent solution to high fuel prices and to free ourselves from recurring fuel price spikes at the whim of volatile and even hostile oil-producing nations is to end our oil addiction. That means sharply decreasing the amount of oil that our vehicles use.

    Later he lists all the changes he proposes to make driving less oil-consuming.

    Not a word about driving less.

  • Niccolo Machiavelli

    Worse for me is that Connecticut is right in the middle of the NY-Boston AMTRAK route, the second most important run on the AMTRAK network. I-95 took down the toll booths about the time Lieberman went to Washington to replace Weichart. New Haven is the last Metro North stop but MN may run on Shoreliner East and North to Hartford. NY and Connecticut are doing what AMTRAK is unable to do, anther example of Federal transportation impotence, if not castration.

  • Seems like no on stuck to the main topic, transportation by rail. Does anyone have any good resources on this subject? I’d like to learn more about the history and the economics of rail in the U.S. and if anyone is looking at that as a potential way to alleviate driving.

    What are the most recent technological developments in the space, etc?

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