United States Senator Jay Rockefeller for West Virginia
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Press Room: Press Releases

May 1, 2008

Floor Statement: Gas Prices

Senator Jay Rockefeller

Mr. President, I would like to take a few moments today to discuss what is a catastrophe all across our Nation--and it certainly is in West Virginia--because of the price of gasoline and other transportation fuels.

   My State is not wealthy. I think it is either the third or fourth poorest State in our country, and I do not say that with shame, I say that with pride because it was, in a sense, one of the reasons I was a VISTA volunteer. I went there as a VISTA volunteer because I saw a place where I could at least try to help. The people are the best ever. When people have to struggle to make it, day-in and day-out, they are pretty solid people.

   As I am sure it is the case for all of my colleagues, for the past few weeks and months I have been hearing from my constituents constantly about rising gasoline prices and the resulting rise in the prices for goods and services throughout our economy.

   West Virginians are hurting. West Virginians will always find a way to persevere--always--but right now many are struggling to juggle expenses, making enormous sacrifices to feed and clothe their families, while trying to pay the cost of going to work. We have plants in West Virginia which people drive hours and hours every day to get to. Work is not easily found, so where it is, people have to drive. We are 96 percent mountains, 4 percent flat. We have a lot of roads. People pretty much have canceled the occasional splurge for a movie. We have a baseball team in West Virginia. That has pretty much been pushed off. In other words, if it is a nonemergency purchase, they bypass it. It takes away from their happiness, their stability as a family, but they have no choice. Belts have been tightened just about as far as belts can be tightened.

   Yet, this week, we hear that oil company profits are again nearing or exceeding record highs and that these companies have no plan and these companies have no desire to increase domestic refining capacity--one of the very few things we know would actually help bring down prices.

   The Energy Information Administration and private sector energy experts tell us to expect gasoline and diesel fuel prices to continue to rise for the foreseeable future. I do not know what that means. I do not think West Virginians care very much what that means. It just means a long time. And a week, a month, is a long time. This is well beyond the usual cyclical annual price fluctuation. And the so-called summer driving season is not even here yet. But other than a brief dip in January, the price West Virginians have been paying at the pump has been climbing steadily since before Christmas--not as noticeable at first, now catastrophic.

   The average price for a gallon of regular gasoline in West Virginia has risen from just over $2.70 a gallon in August 2007 to a price on the last day of April 2008 of $3.71. I do not have new wage data for workers in my State. I wish I did. But I am willing to stand on the floor of the Senate and assert that nobody's salary has risen to match that 37-percent increase.

   The idea of $4-a-gallon gasoline--which 2, 3, 4, 5 years ago would have sounded crazy--really now is a matter not so much of ``if,'' but ``when.'' The timeframe I just mentioned is relevant, of course, because we are a country that has been at war in Iraq for more than 5 years--spending money, letting people do corruption at all levels. I am always suspicious of oil companies. When our brave American forces set out to impose regime change on that country based upon the false--or at least unforgivably imprecise; I prefer the word ``false''--intelligence, West Virginians were paying, on average, $1.63 for regular gasoline. That was not that long ago. It had been as low as $1.26 in the months leading up to the invasion.

   It should come as no surprise to anyone within the sound of my voice, but in that time oil industry profits have risen steadily: almost $60 billion in profits in 2003, just over $80 billion in profits in 2004, approximately $110 billion in profits in 2005, just under $120 billion in 2006, and just over $120 billion so far in 2007. ExxonMobil, Shell, and ChevronTexaco have each had increasingly larger profits each of the last 5 years. BP and ConocoPhillips have done nearly as well. In all, the five largest integrated multinational oil companies have reaped almost $560 billion in profits since President Bush and Vice President Cheney came into town. I don't particularly want to do it that way, because I blame the companies more than I blame them, but there is lots of blame to go around.

   Anyone who looks at the numbers can make this about politics, of course. It is easy to do. But this is, in essence, for me, a former Vista volunteer in my 44th year in West Virginia, all about people. It is simply all about people and families who have been struggling anyway. The average salary for the average working family of four in West Virginia is $31,000. That is not a lot of money, before you get to all of this, and then it is even less.

   Today, if you are lucky enough to live or work near Sam's Club in Vienna, WV, which is on the Ohio River, and you can afford to become a member there, you can get a gallon of gasoline for $3.49. It is hard for anyone I know in West Virginia to think of that as cheap, but it is the lowest price reported in the entire State. Frankly, based on the data I have seen, it is so much lower than the rest of the State that you almost have to consider it an anomaly.

   If you are running low in Spencer, WV, a rural community, however, you need to be prepared to pay $3.82 at the Exxon station on Main Street. It is $3.79 in South Charleston. Residents of Huntington are paying $3.75. In Berkeley Springs, not far from Washington, it is $3.69. No West Virginia county--none--is reporting an average price per gallon of regular gasoline that is below $3.61. Only three of my States' 55 counties are reporting average gasoline prices lower than $3.67.

   Individual price quotes at individual stations are ominous enough, but the real stark numbers, the real telling calculation, is how much more West Virginians are paying for gasoline than they were in years past, and that is not even getting into the meteoric rises in food prices and the other costs essential to daily living. Even those in West Virginia who travel by air, which is the subject of the bill we are meant to be on, those prices have gone up.

   Since 2001, West Virginia households are paying almost $2,500 per year more for gasoline. If it is a household with children, that makes it $3,000. I take my colleagues back to the average salary for the average family of four, working family of four in West Virginia: $31,000. When you add on health care, food, rent, and all the rest, everything else, it is an enormous matter. If it is a household with teenagers, it is just below $3,600 more. Families, businesses, and farmers in West Virginia will spend $153 million more on gasoline in April 2008 than they spent in January 2001.

   If prices remain at current levels, $1.83 billion more will be spent on gasoline in West Virginia this year than was spent in 2001. West Virginia consumers, farmers, and businesses are on a track to pay $2.96 billion for gasoline this year.

   So West Virginians are asking two questions: How did we get here; but to them, much more importantly, what can be done to fix this.

   Nobody in Government, academia, or the private industry can give us a single definitive equation for what makes the price of oil go up and down. We don't know why, but we can't. Generally, increased demand from China, India, and much of the developing world has set the stage obviously for prices that we have to take into consideration.

   Much of our oil comes from an unregulated and unresponsive cartel called OPEC. We also know that since the tragic terrorist attacks of September 11, 2001, the world price for petroleum has been affected by a global struggle against stateless thugs.

   The instability brought about by the invasion in Iraq has done nothing but raise the pump price. I don't know a single benefit to our Nation that has been accomplished there. But smaller factors have also had huge consequences. Instability in Nigeria and the outrageous behavior in Venezuela have contributed in similarly negative ways. The recent strike by refinery and pipeline workers in Scotland, unbeknownst to many of our citizens, will not help. Likewise for the very serious refinery explosion in Utah this week.

   Economists cannot pinpoint how much speculation in the commodities market is adding to the price of oil, but a congressional study in 2005 suggested it was in the $20 to $25 per barrel range. A more recent study announced by Public Citizen said it is now closer to $30 a barrel. It doesn't matter. Every cent of that is being seen at the gas pumps in West Virginia and around the country, and it hurts, and trying to give a worldwide economic explanation for it doesn't solve anybody's problems or anybody's pain.

   We know, too, that the price is manipulated up and down the supply chain. Nobody will ever convince me that there is not a large amount of corruption and manipulation, deliberate, cozy and easy, that goes on around boardrooms in oil companies. From the huge oil companies that find the oil, through more markets and middlemen than we can keep up with, every player has the ability to force the price up for their own bottom line. There is manipulation beyond the reach of my people in West Virginia or the Presiding Officer's people in the State of Colorado. We are at their mercy. We pay the price, we are at the mercy--at the mercy of oil. Federal investigators cannot usually pinpoint collusion, but those acting independently to manipulate prices cost the people of West Virginia all the same. There are a lot of things Federal regulators never manage to find.

   In the long term, the things we need to do sound basic--and this is the final part of my remarks and the important part, other than the overriding theme of anger--such as increasing supply and reducing consumption, but achieving these goals has proved to be very difficult.

   I have long supported efforts to improve automobile fuel efficiency, and so have most other people--not all. We made a small and long overdue change last year, and I believe we will do more. I think CAFE standards are going to go up and up, as they should; cars will get smaller and smaller, as they should. That will not be good for my legs, but it will be good for my people. But even when Detroit catches up with the rest of the world's automakers on fuel efficiency--I repeat, catches up--we do need to add to our supply now.

   That is why in 2006, I supported Senator Domenici's legislation to increase oil and gas exploration in the eastern Gulf of Mexico. When these new fields are fully on line, they will add 1.26 billion barrels of oil to our domestic supply. Now, I say that, but I also have to say in all honesty that I voted against virtually every other attempt to do drilling offshore and in ANWR, for example. ANWR to me has always been a shibboleth. People say: Well, we can get lots of supply there, just as many people or more say it is technically feasible or maybe it is economically feasible, but it is not both. In the meantime, the tundra continues to melt.

   That is why I have also consistently supported holding off on additional deposits in our Strategic Petroleum Reserve. It is more than 97 percent full as it is, and there is no economic rationale for filling it to the brim with $120 per barrel of oil. That product should be making its way into the market some place.

   I joined my colleagues earlier this year to ask the President to suspend deliveries into the petroleum reserve until the price of oil drops below $75 a barrel. Since the President persists in refusing to stop taking oil off the market, I will support legislation to force him to do it.

   I also support, as I have in the past on several occasions, the imposition of a windfall profits tax on integrated multinational oil companies. People say this won't have any effect. I would like to try that out to show that they are wrong and to send a message. The oil companies are making so much money maybe they won't even notice it. But I doubt that, because there are now 300 million Americans who are very angry about what very few of them are doing. As I have said, these companies are making huge, perhaps unconscionable--not perhaps--totally unconscionable profits off the hard-working people in my State and off the wages of struggling Americans everywhere. If they refuse to reinvest in additional refining capacity, which has been their habit, the least we can do is use some of those profits to shore up the highway trust fund for the road infrastructure and transportation projects that we need for the 21st century, and perhaps even for something called aviation. Those projects would create jobs.

   I will also reintroduce legislation this week that I first introduced in 2001. It is called the Low Income Gasoline Assistance Program, or LIGAP. This will provide some relief to Americans hardest hit by any rise in prices; to wit, the working poor, which describes a lot of my State. For many West Virginia seniors who have no means of getting to work, the grocery store, or to a doctor's appointment other than their cars or trucks, if they have them, LIGAP assistance for gasoline purchases will enable them to weather this crisis with a little more peace of mind. I say ``if they have them'' because many people in communities I have worked in throughout West Virginia don't have automobiles, so when they have to go somewhere, usually a pretty long distance, they have to hitch a ride. Even though our people are innately good and generous, because they depend on others as others depend on them, they will usually charge a fee for that ride. In any event, whether they can even take that ride will depend on whether they can afford the gasoline price to get there.

   So LIGAP eligibility would be linked to and modeled after LIHEAP, the very successful and efficient home heating and cooling assistance program. Funds would be distributed to States as additions to allocations under the existing community development block grant program.

   It makes sense. For everyone who qualifies, LIGAP would give stipends of between $100 and $165 a month. Hopefully, this may mean not having to scrimp on their children's food or cut back on prescription drugs and other family needs.

   Families are the basis of our country. People are the basis of everything we do. It is just that there are some sectors of our economy that choose to avoid that because they don't have to depend upon those people because those people have no choice but to buy their products.

   It is time for Congress and the administration to come together and stop bickering--it would be a majestic accomplishment--and stop fighting over turf, as we are doing on the aviation bill. While we engage in parliamentary tactics that most Americans don't give a hoot about--in fact, they hate us for doing it--West Virginians and citizens in every State are suffering, while oil companies are laughing all the way to their many banks. This must stop. I ask my colleagues to work with me to make this stop.