Democrats argue that the measure -- S.940, or the “Close Big Oil Tax Loopholes Act” — would represent a “down payment” on addressing the country’s debt and would help to alleviate gas prices, which are nearing an average of $4 per gallon nationally.
The Senate is expected to hold a vote to proceed on the measure at 6:15 p.m. Republicans, as well as a handful of Democrats, have expressed opposition to the bill, and the measure is not expected to reach the 60-vote threshold necessary to progress.
Tuesday’s vote follows a Senate Finance Committee hearing last week at which the CEOs of the top five oil companies were grilled about the tax incentives and the industry’s record profits.
Republicans have countered that the Democratic plan unfairly targets oil companies and would do little to immediately reduce prices. Rather than blaming big oil, they argue, Congress should be working toward increasing domestic energy production.
To that end, Senate Republicans have introduced a bill of their own, S.953 – the “Offshore Production and Safety Act of 2011” -- that will be up for a vote Wednesday.
“If President Obama and his party are really serious about lowering gas prices, making us less dependent on foreign oil, and creating the thousands of jobs that American exploration is proven to produce, they would embrace our plan and stop pretending to care about a crisis they have done so much to create and, their latest public relations efforts notwithstanding, continue to ignore,” Senate Minority Leader Mitch McConnell (R-Ky.) said in remarks on the Senate floor Tuesday morning.
The House earlier this month approved several measures that Republicans said would alleviate gas prices by opening up more land for oil and gas drilling. The argument in the lower chamber has played out along the same lines as it has in the Senate, with Democrats responding by arguing that speculation, not federal policies on drilling, is to blame.
Meanwhile, the top four Senate Democratic leaders as well as Sen. Claire McCaskill (D-Mo.) are sending a letter to the Federal Trade Commission Tuesday demanding an investigation into whether U.S. refineries are engaging in price fixing.
“According to information posted by the Energy Information Administration U.S. refiners are using only 81.7 percent of their capacity, a decline of 7 percent from the same time last year,” the Senate Democrats write in the letter. “Moreover, since the beginning of 2011 U.S. refiners have seen over a ninety percent increase in their refining margins. While some have argued that this increase is due to potential impacts from recent flooding along the Mississippi River, this cannot justify the steady increases in their margins since January of this year.”
The full text of the letter is below.
May 17, 2011
Jon Leibowitz, Chairman
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, D.C. 20580
Dear Chairman Leibowitz:
We write today to request the Commission begin an investigation into potential price fixing of gasoline by U.S. refiners. Recent reports have indicated that U.S. refiners are cutting back on U.S. gasoline stockpiles in order to artificially keep prices high and inflate their bottom line. If true, this behavior is a direct affront to the American people who are still struggling with the economic downturn. It is currently within the Federal Trade Commission’s (Commission) authority to review these allegations for any potential wrongdoing and to determine the impact these actions may have on gasoline prices both regionally and throughout the country.
The rise in the price of oil is certainly a driving factor behind the recent rise in gasoline prices, but concerns have been raised that while gasoline use is declining, U.S. gasoline inventories remain below average and refining margins continue to rise. According to information posted by the Energy Information Administration U.S. refiners are using only 81.7 percent of their capacity, a decline of 7 percent from the same time last year. Moreover, since the beginning of 2011 U.S. refiners have seen over a ninety percent increase in their refining margins. While some have argued that this increase is due to potential impacts from recent flooding along the Mississippi River, this cannot justify the steady increases in their margins since January of this year.
At a time when major refiners and oil companies are making record profits and American families continue to struggle with gasoline at record prices the idea that refiners may be manipulating the market to keep prices artificially high goes beyond reproach. It is incumbent upon the Commission to ensure that the American people are protected from this type of manipulation. Accordingly, we request that the Commission open a full investigation into these allegations of wrongdoing and to determine the impact this behavior, if confirmed, has on regional and national gasoline prices.
Thank you for your consideration of our request. Should you have any questions about please feel free to contact Senator McCaskill’s office at 202-224-6154. We look forward to hearing from you.
Senator Claire McCaskill Senate Majority Leader Harry Reid Senator Dick Durbin Senator Charles E. Schumer Senator Patty Murray