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The witnesses are:
Joint Committee Hearing on Energy Prices and Profits
November 9, 2005
Senator Ted Stevens
In public, prior to opening statements
If I may, there’s a question that’s been raised before we start the hearing. The question of whether Senator Domenici and I should administer oaths today to these witnesses at today’s hearings was raised by a letter than I received this morning at 8:10 a.m., after it was delivered to the press. As a matter of fact, there’s a story in the Seattle paper about the request having been denied already. I remind the witnesses as well as the Members of these Committees, Federal law makes it a crime to provide false testimony, specifically Section 1001 of Title 18 provides in pertinent part: whoever in any matter within the jurisdiction of the Legislative Branch of the Government of the United States knowingly or willfully makes any material false, fictitious, or fraudulent statement or representation shall be fined under this title or be imprisoned not more than 5 years, or both.
I have reviewed the Rules of the Senate and the rules of the Commerce and Energy Committees and in effect in this Congress and the relevant provisions of Title II of the United States Code. There is nothing in the Standing Rules of our Committee Rules or in the Senate which requires witnesses to be sworn. The statute has the position that everyone appearing before the Congress is in fact under oath. These witnesses accepted the invitation to appear before our Committees voluntarily. They are aware that making false statements and testimony is a violation of Federal law whether or not an oath has been administered. I shall not administer an oath today.
Opening Statement: Panel 1
Over the last two years, energy prices have tripled – the cost of oil has risen at least once to $70 a barrel. All Americans know now that the cost of energy is going up, but in the wake of Hurricanes Katrina, Rita, and Wilma, there is fear about how sharply these prices have risen. Americans are now concerned whether they should be paying so much more for energy when our country’s energy companies are recording record profits.
Today we will hear testimony from: • Lee Raymond, Chairman and CEO of the Exxon Mobil Corporation
• David O’Reilly, Chairman and CEO of the Chevron Corporation
• James Mulva, Chairman and CEO of ConocoPhillips
• Ross Pillari, Chairman and CEO of BP America, and
• John Hofmeister, President and U.S. Country Chair of Shell Oil Company
Thank you, gentleman, for coming to appear before us today voluntarily. This hearing is an opportunity for your companies – the major energy companies of our country – to address the concerns. We do sincerely want to listen to your thoughts.
This is a joint hearing. The members of two committees are here today, and as I indicated, each Senator will be entitled to ask questions for five minutes. I urge that the witnesses’ answers be succinct as possible and that the witnesses observe the timer clock, which should be visible to all concerned.
In my judgment, this hearing should be a respectful discussion about our nation’s energy prices. I intend to be respectful of the position these gentlemen hold. In turn, I know each of you will understand that those of us at this table have a duty to our constituents and to all Americans to seek the information we will seek today.
Specifically, we want you to discuss the steps your industry plans to take to alleviate price concerns. We need to gain your perspective on some of the initiatives members of Congress have proposed that aim to assist communities in meeting increased energy costs.
Opening Statement: Panel 2
This is the continuation of our hearing today on the issue of energy prices. The purpose of this afternoon’s hearing is to discuss whether states have the tools they need to address allegations of price gouging, and whether Congress should require the Federal Trade Commission to investigate these activities.
With us today are three State Attorneys General:
• New Jersey Attorney General Peter Harvey
• South Carolina Attorney General Henry McMaster
• Arizona Attorney General Terry Goddard
We will also hear from Deborah Platt Majoras, Chairman of the Federal Trade Commission.
Hurricanes Katrina, Rita, and Wilma severely damaged our nation’s production and refining capabilities. In the immediate aftermath of these storms, there was a sharp rise in gasoline prices.
Those of us elected to public office have a duty to our constituents and all Americans – and we are concerned about allegations of consumer price gouging. Several members have responded to these allegations by introducing price gouging legislation. Some of these bills suggest states should be preempted by federal legislation. Under these proposals, the Federal Trade Commission would monitor, investigate, and prosecute those suspected of price gouging activities.
I am interested in hearing our witnesses’ thoughts on how to determine what really constitutes price gouging, and whether the state or federal government is best equipped to address these activities.
I look forward to hearing your statements.
Questions – Attorneys General
• Twenty-seven states and the District of Columbia have price gouging laws on their books. However, those laws vary in their definition of “price gouging.” How does this affect your ability to determine whether price gouging has occurred? Does it hinder your ability to prosecute those suspected of price gouging?
• Do you believe that retail gas station owners who raise prices in anticipation of high replacement costs are price-gouging consumers? Given the need for station owners to use replacement cost pricing, how do you determine when a station owner has engaged in price gouging?
Questions – Federal Trade Commission Chairman Majoras
• What processes does the FTC have in place to quickly investigate allegations of price gouging or collusion during instances of abnormal market disruption? Are there contingency plans for these processes when there is a crisis?
• Twenty-seven states and the District of Columbia have price gouging laws on their books. However, these laws vary in their definition of “price gouging.” Could a federal law defining price gouging clear up some of the uncertainty about what constitutes gouging?
Witness Panel 1
Mr. James MulvaChairman and Chief Executive OfficerConocoPhillips
Mr. Lee RaymondChairman and Chief Executive OfficerExxon Mobil Corporation
Mr. Ross PillariPresident and Chief Executive OfficerBP America Inc.
Mr. David O'ReillyChairman and Chief Executive OfficerChevron Corporation
Mr. John HofmeisterPresident and US Country ChairShell Oil Company
Witness Panel 2
Mr. Peter C. HarveyNew Jersey Attorney GeneralOffice of the Attorney General
Mr. Henry McMasterSouth Carolina Attorney GeneralOffice of the Attorney General
The Honorable Deborah Platt MajorasChairmanFederal Trade Commission
Mr. Terry Goddard