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Senator orders probe into high energy prices

Amid record-high earnings from oil companies, Senate Majority Leader Bill Frist Thursday ordered a Senate hearing with testimony from major oil company executives on why energy prices are high.
/ Source: Reuters

Amid record-high earnings from oil companies, Senate Majority Leader Bill Frist Thursday ordered a Senate hearing with testimony from major oil company executives on why energy prices are high.

The unexpected announcement by the chamber’s top Republican showed the growing political pressure as American consumers brace for higher winter heating costs at the same time energy companies are reporting fat profits.

“If there are those who abuse the free enterprise system to advantage themselves and their businesses at the expense of all Americans, they ought to be exposed, and they ought to be ashamed,” Frist said in a statement.

The Senate leader also asked the chamber’s permanent subcommittee on investigations to launch an inquiry into energy price profiteering. “And ultimately, if the facts warrant it, I will support a federal anti-price gouging law,” he said.

Democrats have already introduced several proposals to outlaw oil price profiteering. The nationwide average retail gasoline price topped $3 a gallon soon after Hurricane Katrina hit and crude oil soared to a record $70 a barrel.

Prices have since eased somewhat, but the U.S. government forecasts winter heating costs will be sharply higher for consumers.

Frist said he asked the Senate Energy Committee and the Senate Commerce Committee to hold a joint hearing to look at the reasons behind energy prices. He did not say if a date has yet been set.

“I have asked them to call as witnesses executives from the major oil companies and representatives of the state attorneys general, who have the initial responsibility of keeping the behavior of local energy providers on the straight and narrow,” Frist said.

Since the hurricanes hit the U.S. Gulf Coast, Republicans have sought to offer more federal incentives to energy companies to build or expand oil refineries. Democrats this week blocked a Senate plan, saying oil companies were making enough profits to fund such expansions themselves.

On Thursday, Exxon Mobil reported third-quarter earnings of $9.9 billion -- one of the largest quarterly profits in U.S. corporate history.

“We need to increase refinement capacity, provide more energy resources, encourage conservation, invest in science and technology, and, most importantly, transition towards energy independence, including the use of more alternative fuels,” Frist said.