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Joe Lieberman: Did Someone Say “High Gas Prices”?

How obsessed is Washington with gas prices? Acting on a Streetsblog post from last week, a reader wrote Connecticut Senator Joe Lieberman urging him to support legislation that would bolster funding for Amtrak. In response, Lieberman's office sent a long, long form letter outlining the many ways the senator is -- you guessed it -- working to keep gasoline as accessible as possible.

Thank you for contacting me regarding high oil and gasoline prices. Ifully share your concerns; and I am working to alleviate the pain atthe pump on several fronts through a number of legislative measuresthat are intended to ease gas prices, increase oversight of energymarkets, prevent price gouging, increase fuel efficiency and vehiclefuel economy standards, reduce America's dependence on foreign sourcesof oil, and increase tax benefits for renewable energy and conservation.

Lieberman then goes on and on about record oil company profits, "exploitative pricing" and reducing dependence on foreign oil, and also proclaims his support for diverting from the national reserve. As for transportation, it's all about CAFE standards, alternative fuels and the gas tax "holiday" -- measures which somehow dovetail with his efforts to mitigate climate change. There's even a link for tracking gas prices. Non-automotive means of transport are never mentioned.

Guess with all the energy he's devoting to making it easier to drive, Lieberman hasn't found time to crank out a constituent letter that at least pays lip service to passenger rail.

Follow the jump for the full text.

Thank you for contacting me regarding high oil and gasoline prices. I fully share your concerns; and I am working to alleviate the pain at the pump on several fronts through a number of legislative measures that are intended to ease gas prices, increase oversight of energy markets, prevent price gouging, increase fuel efficiency and vehicle fuel economy standards, reduce America's dependence on foreign sources of oil, and increase tax benefits for renewable energy and conservation.

As you well know, America's drivers are paying exorbitant prices to fill their tanks; and the U.S. economy is beginning to suffer along with the country's consumers. In the spring of 2007, gasoline prices surged over $3.00 per gallon, stayed near that level during the summer driving season, and, after a brief retreat, returned there at the beginning of 2008 and have been steadily climbing ever since then. The price of oil accounts for at least half the price that consumers pay for gasoline at the pump. Unfortunately, oil prices are volatile and rising over the long term. At the same time, consumption of gasoline has continued to rise above nine million barrels per day (mbd), setting a record high summer peak of over 9.7 mbd during 2007.

Meanwhile, oil companies are enjoying record profits, thanks, in no small part, to a conscious strategy on their part to reduce our country's refining capacity. Overall, a large number of factors have combined to put pressure on gasoline prices, the fundamental reason being the shrinking margin between global oil demand and global oil supply. The increased world demand for crude oil and limited U.S. refinery capacity to supply gasoline to a growing national economy, combined with the war and continued violence in Iraq, has added to the atmosphere of uncertainty. Threats of supply disruption have also added pressure, particularly to the commodity futures markets.

Over the years, industry insiders have advised U.S. oil companies to reduce spare refining capacity as a way to boost profits. As one Chevron memo paraphrased the advice, "if the U.S. petroleum industry doesn't reduce its refining capacity, it will never see any substantial increase in refining margins." The oil companies heeded the advice with a vengeance; by 2004, idle refining capacity in the United States was a third of what it had been ten years earlier. In May 2007, along with other members of the Connecticut delegation, I requested an investigation by the U.S. Government Accountability Office (GAO) into the possible role of refinery outages, planned and unplanned, on gasoline prices and refinery company profits.

Between 1999 and 2004, the profit margin of U.S. refiners increased 80 percent. The widening profit margin would stimulate new competitors to enter the domestic refining market, if only the market were competitive. Unfortunately, the federal government's antitrust enforcers have stood by as oil companies have merged and merged again. Now the remaining behemoths are powerful enough to block new entrants. According to GAO, the increased market concentration caused by the mergers had led to higher wholesale gasoline prices.

In view of the important concerns you raised, I welcome this opportunity to bring you up to date on the many actions I have taken, both past and present, to address high oil and gas prices as outlined below:

  • Continued high gasoline prices have placed the energy issue at the forefront of legislative debate and led to a broad spectrum of proposed new legislation during this 110th Congress. For instance, after much debate, the Energy Independence and Security Act (CLEAN Energy Act; H.R. 6), which was passed by Congress, with my support, and signed into law by President Bush in December 2007 (P.L. 110-140), includes several forward-looking policies that I played a key role in advancing and which promise to enhance economic and national security and help end America's crippling oil dependence. These include substantially reducing our reliance on a global oil market that is dominated by volatile, and even hostile, foreign governments; an increase in the Corporate Average Fuel Economy (CAFE) standards for automobiles and light trucks; and an increase in the requirement for the use of renewable fuel sources that have lower net greenhouse gas emissions, such as the use and development of cellulosic biofuels, electric vehicles, hybrid or plug-in electric cars, fuel cell powered cars, and advanced diesel, starting in 2016. 
  • On October 18, 2007, Senator John Warner (R-VA) and I introduced the Lieberman-Warner Climate Security Act (S. 2191), a new, bipartisan, economy-wide, cap-and-trade bill which contains a number of provisions also aimed at reducing dependence on foreign oil. In addition to addressing the problem of climate change, the bill also works to bring other, domestically produced fuels and technologies that do not use gasoline at all into the market to compete with gasoline and drive prices down.
  • We must reintroduce competition and crack down on exploitative pricing throughout the oil industry. To that end, Congress should pass legislation along the lines of Senator Maria Cantwell's (D-WA) Clean Energy Development for a Growing Economy (Clean EDGE) Act, which I proudly cosponsored during the 109th Congress, in order to go after the oil industry's anti-competitive practices. Provisions in the Clean EDGE Act would give the Federal Trade Commission new authority to prohibit anti-consumer practices in the oil industry; direct GAO to investigate the federal government's response to consolidation in the oil industry; prohibit oil companies from withholding sales or diverting supplies with the intent of inflating prices; and outlaw excessive increases in the prices of petroleum products.
  • This Congress, I supported additional legislative efforts to increase oversight of energy markets by signing on as an original cosponsor of the Oil and Gas Traders Oversight Act (S. 577), bipartisan legislation introduced by Senator Dianne Feinstein (D-CA) to increase transparency and accountability for the electronic over-the-counter trading of energy commodities, such as oil, natural gas, coal, and electricity. Furthermore, I am a cosponsor of the Oil Industry Merger Antitrust Enforcement Act (S. 878), sponsored by Senators Herb Kohl (D-WI) and Arlen Specter (R-PA), to help restore competitive conditions to the oil refining industry. I also have sponsored past legislation that would impose a 50-percent tax on windfall profits from oil produced by integrated oil companies. The revenue generated by the tax would help low- and middle-income consumers who just came through a winter of soaring home heating costs and are now facing a summer of record-high gasoline prices. 
  • Moreover, I supported legislation, along with several of my Senate colleagues, that would immediately reduce upward pressure on the price of gasoline by suspending purchases of oil for the Strategic Petroleum Reserve (SPR).  The Strategic Petroleum Reserve Fill Suspension and Consumer Protection Act (S. 2598), introduced by Senator Bryon Dorgan (D-ND),  authorizes a one-year suspension from filling the SPR through royalty-in-kind transfers, direct purchase, or any other acquisition measure. At a time of historic high oil prices, a time-out from government oil purchase will ease pressures on the market and offer reduced prices to consumers.  This legislation provides the necessary signal to the market by not diverting oil to fill the SPR. Now is not the time to divert oil from the market when we are experiencing record oil prices, rising consumer energy costs and other economic burdens, an economic downturn, and a tightening of global oil supplies. 
  • Most recently, on April 17, 2008, I cosponsored legislation (S. 2890), introduced by Senator John McCain (R-AZ), to provide for a highway fuel tax holiday.  I am also supporting an amendment offered by Senators McCain and Jon Kyl (R-AZ) for a gas tax holiday that would waive the federal gasoline tax from Memorial Day to Labor Day. 
  • Ultimately, the only permanent solution to high fuel prices and to free ourselves from recurring fuel price spikes at the whim of volatile and even hostile oil-producing nations is to end our oil addiction. That means sharply decreasing the amount of oil that our vehicles use. The United States simply cannot drill its way out of this bind; and any amount of oil produced from new wells in the United States would just be a trickle in the global oil market. Thus, any domestic drilling would not have any appreciable effect on the price Americans pay on that market. To this end, I, along with Senators Evan Bayh (D-IN), Sam Brownback (R-KS), Norm Coleman (R-MN), and others, introduced bipartisan legislation aimed at breaking America's dependence on oil. Through a variety of steps, our Dependence Reduction through Innovation in Vehicles and Energy (DRIVE Act; S. 339) would reduce U.S. oil use by seven million barrels per day in 20 years - more than twice what we import from the Middle East today.  To implement these savings, the DRIVE Act would set rising targets for manufacturers to produce flexible fuel, alternative fuel, hybrid, plug-in hybrid, and fuel cell vehicles; institute loan guarantees, grants, and tax credits to promote sales of those vehicles; mandate the development of fuel efficiency standards for heavy-duty vehicles; eliminate the current tax break for purchases of heavy sport utility vehicles (SUVs); require the federal government to improve the fuel efficiency of its vehicle fleets; institute a program for increasing the use of fuel-saving tires; and institute a series of other critical measures for increasing domestic production of ethanol fuel.

For more information on S. 339 and other energy security efforts I have authored and championed, please click on this link on my web site outlining my work on energy independence at:  To keep track of future actions on S. 339 and the other legislation referenced in this letter, you can go to the "Bill Tracking" service at

Please be assured that I am committed to seeing these strong, common-sense measures passed into law during this 110th Congress. Also, to find what gasoline stations are charging in your area, please go to my home page at and click on the "Rising Gas Prices" link under "Connecticut Corner" on the left-hand side of the page.

Thank you again for sharing your views, concerns, and suggestions with me. I hope you will continue to visit my web site at for updated news about my work on behalf of Connecticut and the nation. Please contact me if you have any additional questions or comments about our work in Congress.

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