U.S. Senate Committee on Environment & Public Works
U.S. Senate Committee on Environment & Public Works
Hearing Statements
Date:   05/12/2004
 
Statement of Senator Harry Reid
Environmental Regulations in Oil Refining

Mr. Chairman, I want to thank you for calling this hearing today on gasoline prices. As you know, gasoline prices are at a record high across the nation and have reached alarming levels in Nevada and California.

A regular, unleaded gallon of gasoline this morning costs $2.21 in Las Vegas, $2.26 in Reno, while higher blend fuels are approaching $2.50 per gallon.

Since the first of the year, the price of gasoline has increased more than 57 cents in Las Vegas and Reno.

There is no doubt that the price of crude oil has contributed to higher gasoline prices in Nevada and throughout the country in the last few years. However, this outrageous 57-cent increase in Nevada since January has not been driven by the rising cost of crude oil, but by corporate greed and profit.

Big oil companies and refiners are getting rich and middle class families are getting gouged.

This is not speculation on my part.

It's clearly documented by the California Energy Commission and the DOE Energy Information Administration that refiner margins (i.e., refiner's cost plus profits) have doubled and tripled. The oil companies weren't content to make 25 cents on every gallon of gasoline. They now make 50 to 75 cents for every gallon of gasoline.

Some say this is an example of the law of supply and demand. That it is ... the refiners have the supply and they'll demand your pocketbook.

I have received hundreds of letters from Nevadans whose budgets are being stretched by these skyrocketing prices. Gasoline isn't a luxury for families ... it is a necessity. Families have to put gas in their vehicles so they can drive to work, take their children to school, and go to the grocery store.

The big oil companies control the supply, and they know that families really have little choice in the matter ... they literally have consumers over a barrel.

While consumers were paying record prices, the oil companies were reaping record profits.

The first quarter profits for the big oil companies were recently released. What a shock - the refining and marketing profits of the big four oil companies have increased by a staggering amount over one year ago!

BP up 165%
Chevron-Texaco - up 294%
Conoco-Phillips - up 44%
ExxonMobil - up 125%

And major California refineries owned by Valero and Tesoro that supply the Las Vegas and Reno area have reported "record" profits and project even bigger gains in the months ahead.

Not "good" profits, not "great" profits, but "record" profits.