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Senate Commerce Committee Approves Cantwell's Gas Price Gouging Ban

Price gouging protections included in legislation to raise average fuel economy of cars, small trucks, and SUVs to 35 miles per gallon by 2020

Tuesday, May 08,2007


WASHINGTON, DC - Tuesday, the Senate Commerce Committee passed legislation introduced by U.S. Senator Maria Cantwell (D-WA) to make gas price gouging a federal crime and put in place tough new federal protections to guard against market manipulation by oil and gas companies. Cantwell offered her legislation as an amendment to a fuel economy bill she and Senator Dianne Feinstein (D-CA) introduced in January. The Commerce Committee approved the Cantwell amendment, as well as the landmark fuel economy bill, which would raise the combined nationwide average fuel economy standards for all SUVs, cars, and small trucks from 25 to 35 miles per gallon by 2020.

"Regular gas prices in Washington state are averaging $3.40 right now," said Cantwell, a member of the Senate Commerce Committee. "That's higher than last year or in the aftermath of Hurricane Katrina. We need better consumer protections on the books. Gas prices and oil company profits are both at record levels, and consumers are left with no way of knowing whether they're being taken for a ride. With the high prices of Memorial Day just around the corner, we need to get this bill to the president's desk."

Cantwell introduced her bipartisan gas price gouging legislation (S. 1263) last week, and offered it Tuesday as an amendment to the fuel economy bill (S. 357). Based on Cantwell's measures to ban Enron-style manipulation schemes in the electricity industry, her legislation would give the president the authority to declare national energy emergencies during which proven price gougers would be subject to new fines and criminal penalties.

Under the legislation, the Federal Trade Commission (FTC)—an independent regulatory agency—could conduct investigations and fine companies for price gouging. The Department of Justice would enforce criminal penalties for gas price gouging during energy emergencies declared by the President. Energy emergencies could be declared during oil market disruptions, similar to those that followed Hurricane Katrina. At present, there are no federal laws on the books that address price gouging for oil and gas, though 28 states have laws similar to Cantwell's proposal and it is modeled primarily on a New York statute that has withstood court scrutiny.

Cantwell first introduced her bill to ban gas price gouging in 2005. In November of that year, her legislation garnered 57 votes as an amendment to the Tax Reconciliation bill—including the votes of 13 Republicans—but it required 60 votes for passage at the time. It was cosponsored by one-third of the Senate, and endorsed by eight governors and nine attorneys general. The committee's approval of the bill Tuesday marks the first time the panel has passed this legislation and sent it on to the full Senate. Cantwell vowed to work to make sure the legislation is taken up by the full Senate as soon as possible.

On Tuesday, regular gas in the Seattle area cost as much as $3.59 per gallon—$3.45 in Spokane and $3.59 in Portland. According to the American Automobile Association (AAA), the current statewide average of $3.40 is a record high in the state's history.

For more information on the overall fuel economy bill passed by the Senate Commerce Committee, visit http://cantwell.senate.gov/news/record.cfm?id=267815