House Leaders Say Oil Refining Must Expand
Wednesday, October 26, 2005
As oil companies prepare to announce large quarterly profits, House Republican leaders yesterday said they need to spend more to expand the nation's refining capacity.
Five Republican leaders, appearing at a news conference, said increasing the capacity of refineries -- which produce gasoline, heating oil and other oil products -- would help lower high consumer prices.
"We expect oil companies to do their part to ease the pain," House Speaker J. Dennis Hastert (R-Ill.) said at the news conference. In prepared remarks, Hastert said that "increasing capacity and improving refineries will help boost supplies so that consumers do not feel such a big pinch."
The comments came after hurricanes that significantly disrupted refining operations in the Gulf Coast region, tightened supplies and sent gasoline prices above $3 a gallon. In recent weeks, as refineries have come back online and demand has decreased, prices have declined and were about $2.61 yesterday for a gallon of regular, according to a AAA-sponsored survey.
Lawmakers have been under pressure from constituents to address high energy prices.
This week, several oil companies are announcing quarterly profits that analysts expect have swelled as a result of high prices and tight supplies of crude oil and gasoline. London-based BP PLC yesterday reported profit of about $6.46 billion, up 34 percent from the same period last year.
Refining capacity has not expanded as quickly as demand in recent years. But oil industry officials said they are spending significant amounts of money to increase refinery capacity and that Congress should ease environmental restrictions and make it easier to obtain permits.
"We support the call for more refinery capacity," said Red Cavaney, president of the American Petroleum Institute, a Washington-based industry group. "We're going to keep increasing capacity on the refineries."
Democrats and environmentalists said Republican leaders were trying to make it appear as if their party was doing something about high consumer prices when it has been more focused on providing tax breaks for big oil companies.
"After passing two energy bills that failed to address energy prices, it's absurd that House leadership is standing up now claiming they're going to address the problem," said Tiernan Sittenfeld, legislative director of the League of Conservation Voters, a Washington-based environmental group. "They're trying to head off anger that could be directed both at the companies and at them."
The news conference -- which also included Reps. Deborah Pryce (R-Ohio), David Dreier (R-Calif.), Eric I. Cantor (R-Va.) and Joe Barton (R-Tex.) -- featured criticism of Democrats for not supporting Republican energy measures. Hastert faulted Democrats for not backing legislation seeking oil and natural gas production in Alaska's Arctic National Wildlife Refuge and other locations, saying more needed to be done to reduce dependence on foreign oil.
Barton criticized Democrats for not supporting a measure recently approved by the House on a largely party-line vote that provides incentives to expand refining capacity -- a measure Democrats said was a giveaway to big oil. "We're letting Democrats know it's no free walk," Barton said.
Democrats said that they had repeatedly sought measures to increase automobile mileage requirements and take other steps to reduce consumption that were defeated because of Republican opposition.
Rep. Henry A. Waxman (D-Calif.) said high prices are partly the result of the "failure of Republicans in power in Washington to invest in alternative fuels and conservation and other efforts that will make us less dependent on oil."