'10 Tough Questions Reporters Should Ask on Oil and Gas PricesFor starters, Joseph Davis asks: Why is Congress so passive on the lack of refining capacity? What about probes into price manipulation? The House passed a bill on price gouging; who’s holding it up in the Senate?
By Joseph A. Davisjdavis2@starpower.net
Q. If Congress and the candidates are serious about reducing U.S. dependency on foreign oil, why would they passively accept little or no growth in U.S. refining capacity at a time when world refining capacity is growing?
Q. What has come of the various Congressional investigations, or calls for investigations, into possible manipulation of the domestic motor fuel market?
Q. What are the prospects for the House-passed bill (H.R. 1252) setting stiff penalties for gasoline price-gouging? Why has the Senate Commerce Committee taken no action on it? What Senators are holding it up?
Q. What are the root causes of soaring oil and gasoline prices? What will candidates and Congress do to address them?
Q. Why has U.S. refinery capacity not grown more and more quickly?
Q. What is the financial strategy that causes oil companies not to invest more in refinery capacity at a time when they are flush with profits and demand exceeds supply and is growing? How much, precisely, is industry currently investing in new or increased refinery capacity? What do stockholders think of this?
Q. How is the price of domestic wholesale and retail gasoline actually set? Is it really a free, open, and competitive market? Does the diminishing number of companies in the market – and the ownership of distribution and retail outlets by the refining companies – offer opportunity for anti-competitive practices?
Q. What is the credibility of industry claims that refiners are worried that demand for gasoline may drop disastrously as a result of the government push for more ethanol use? How does this square with historical demand growth and the current market signal of strongly and persistently rising prices?
Q. What is the credibility of the Federal Trade Commission’s 2006 report [also click here] finding no manipulation or collusion among refiners in restricting supply or setting prices. Are those findings consistent with findings in the FTC’s 2001 investigation?
Q. Has the Justice Department investigated the possibility of anti-competitive practices in the domestic motor fuel industry? What were the results? Did then-Attorney General Alberto Gonzales in 2006 shut down a Justice Department investigation sought by state Attorneys General?
The price of gasoline at the pump is climbing steadily toward $4.00, the summer driving season is likely to make things worse, and some political leaders have again begun trying to convince the voters that they have solutions.'
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