Senate Majority Leader Bill Frist (R-TN) wants the nation's leading energy executives to appear at a joint Senate hearing to answer questions about why energy prices have gotten so far out of hand. As energy companies turned in record profits last week, Republicans and Democrats alike began dusting off proposals to impose taxes on the windfall profits.
He has asked two Senate committees to hold a joint hearing at which executives of energy companies will testify about the escalating prices. Frist also directed a Senate subcommittee to begin an inquiry into possible price-gouging. His announcement came on the heels of news reports that ExxonMobil Corp. posted record profits of nearly $10 billion for the third quarter. Shell, ConocoPhillips and British Petroleum also reported significant increases in their earnings.
"At the same time that oil companies are posting record profits, Americans are paying more than ever to fill up their cars and heat their homes. Whether it is fluctuating gas prices, disparities in gas prices at stations right next to each other, the sharp rise in natural gas costs, or the anticipated crunch for home heating oil, Americans are wondering what has happened to push costs through the roof," he said.
The public paid more than $3/gallon for gasoline in the wake of Hurricane Katrina, which struck the Gulf Coast in late August. But that pales in comparison to the increases in heating fuel costs that are expected this winter. The Energy Information Administration forecasts that natural gas customers can expect to pay 48%, or $350, more (under normal weather) from October through March for natural gas as wholesale prices average $11.40/Mcf.
The record oil company profits reported for the third quarter this past week sent Republicans and Democrats alike into action on Capitol Hill. Sen. Judd Gregg (R-NH), chairman of the Senate Budget Committee, said it was time to take a "serious look" at reinstituting an excess profits tax on oil companies, with proceeds going to pay for the Low-Income Home Energy Assistance Program (LIHEAP) and deficit reduction. "I intend to pursue options in this area over the coming weeks."
Sen. Charles Schumer (D-NY) introduced a bill to tax the windfall profits of large energy companies to raise money for Katrina relief and reduce the federal deficit, up to $60 billion over two years. Other Democrats have proposed anti-gouging measures.
Frist said he has asked the Senate Energy and Natural Resources Committee and Senate Commerce, Science and Transportation Committee to schedule the joint hearing on energy prices. Given that the Senate will be focused on the budget reconciliation process in the upcoming week, the earliest the two committees could possibly schedule the hearing is for the week of Nov. 7, a spokesman with the energy committee said.
Frist also called on the Senate's Permanent Subcommittee on Investigations to look into allegations of price-gouging. "And ultimately, if the facts warrant it, I will support a federal anti-price gouging law," he said.
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