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Flawed energy bill passed by House won’t stop gasoline rate shock

October 7, 2005

Flawed energy bill passed by House won’t stop gasoline rate shock
House blows opportunity to increase vehicle fuel efficiency,
boost oil supplies and attack price gouging

(Washington, D.C.) — The Consumer Federation of America (CFA) and Consumers Union (CU) today criticized energy legislation (H.R. 3893) passed by the House by a narrow two-vote margin because it would not take serious steps to ease the gasoline price shock that is now placing a heavy financial burden on low and moderate income consumers.
“The House has blown a major opportunity to help the millions of Americans who are reeling from high gasoline prices,” said Mark Cooper, CFA’s research director. “The bill fails to promote energy efficiency for automobiles or to ensure that refineries will be built to protect the public from price increases. Instead, the bill provides another round of subsidies for oil companies and refiners already enjoying record prices and profits.”
“Increasing refinery capacity and creating a large refinery reserve is key to alleviating price pressures and protecting consumers from price spikes,” Cooper said, “because the oil industry has kept the refinery sector tight by closing 50 plants in the past 15 years and failing to build any spare capacity.”
The two organizations also expressed concern that H.R. 3893’s approach to deterring gasoline price gouging would fail. It does not grant state and federal regulators specific federal legal authority to investigate and punish price gouging, but instead calls for a study of the problem.
CFA and CU supported alternative legislation that was offered by Representatives Stupak and Boucher directing the Secretary of Energy to establish and operate an extremely large Strategic Refinery Reserve that would release refined fuel during energy emergencies under the direction of the Department of Energy, not the industry. The Stupak-Boucher alternative would also explicitly empower the Federal Trade Commission and the states under Federal law to combat price gouging in the sale of crude oil, gasoline, natural gas or petroleum distillates. A vote on this alternative failed the House by 23 votes.
CFA is a non-profit association of more than 300 organizations that, since 1968, has sought to advance the consumer interest through research, advocacy and education.
Consumers Union is a nonprofit membership organization chartered in 1936 under the laws of the State of New York to provide consumers with information, education and counsel about goods, services, health, and personal finance; and to initiate and cooperate with individual and group efforts to maintain and enhance the quality of life of consumers. Consumers Union’s income is solely derived from the sale of Consumer Reports, its other publications and from noncommercial contributions, grants and fees. In addition to reports on Consumers Union’s own product testing, Consumer Reports with approximately 4 million paid circulation, regularly carries articles on health, product safety, marketplace economics and legislative, judicial and regulatory actions which affect consumer welfare. Consumers Union’s publications carry no advertising and receive no commercial support.

CONTACT: Mark Cooper, (301) 384-2204