Tomorrow, the House Oversight & Government Reform committee will hold a hearing about the role of speculation in gas prices. Ranking member Elijah E. Cummings has released a report examining the root causes of inflated fuel costs, which concludes that the debate so far has been focused on the wrong things.
Instead of listening to energy executives (who represent the most profitable industry in the world, to the tune of $31 billion for the top five oil companies in the first quarter of FY 2011 alone) rail against the prospect of losing their taxpayer subsidies or complain about post-BP spill safety measures, Rep. Cummings argues that the Oversight & Government Reform committee would better serve Americans by turning its attention to speculators:
With gas prices skyrocketing to more than $4 per gallon, it is time to stop focusing on advancing the priorities and profits of oil companies and instead find ways to give American consumers relief at the pump. I call on Chairman Issa to stand with consumers and conduct a responsible, bipartisan investigation into the impact of excessive speculation on high gas prices.
Some of the report’s key findings include:
- Excessive oil speculation could be inflating gas prices by as much as 30%; the single most significant opportunity to reduce gas prices is to counter excessive speculation.
- Expanded domestic drilling or eliminating post-BP oil spill safety measures would have negligible impact on gas prices.
- Drilling is not the problem – post BP, the Administration has approved 14 deepwater drilling permits, 55 shallow water permits, and two new exploration plans.
- In the midst of the worst economic crisis since the Great Depression, the oil business is the most profitable industry in the world. The top 5 oil companies reported profits of $31 billion in the first quarter of FY 2011, a 32.6% increase over the first quarter of 2010.
- Eliminating tax subsidies could save more than $43 billion over the next 10 years, and foregoing the collection of market-rate royalties from companies that drill in the Gulf costs taxpayers up to $53 billion.
OGR committee chairman Darrell Issa now has an excellent opportunity to hold a hearing that could help the American people instead of his corporate friends – let’s see if he comes through.