House Panel to Hold Hybrid Hearing on Gas Prices
WASHINGTON — The surging price of gasoline across the country will be the subject of a hybrid hearing April 6 before a subcommittee of the House Energy and Commerce Committee.
The Subcommittee on Oversight and Investigations will convene on Wednesday, April 6, at 10:30 a.m. in the John D. Dingell room of the Rayburn House Office Building.
The hearing, which will also be streamed on the committee’s website, is entitled, “Gouged at the Gas Station: Big Oil and America’s Pain at the Pump.”
On Feb. 21, 2022, three days before Russia invaded Ukraine, the price of a gallon of gasoline in the United States was $3.53.
Since then, the price has increased by 19.9%, and on March 28, the average price of one gallon of gasoline reached $4.23 — its highest levels since July 2008.
What few lay people understand is that while the United States is the largest oil producer in the world, the gasoline prices that Americans pay at the pump are still affected by changes in the price of crude oil on the global markets.
In recent weeks, these prices have also approached near record highs. For example, on March 7, the price of one barrel of West Texas Intermediate — the benchmark for the price of crude oil produced in the United States — reached a high of $130.50 on the futures market, and peaked at $123.64 on the spot market the next day.
The price of one barrel of Brent Crude Oil — which serves as a benchmark for international oil prices — peaked at $139.13 in the futures market on March 7, and hit $133.18 on the spot market on March 8.
Though crude oil prices have fallen from their highs in early March, the price Americans pay at the pump remains elevated.
Persistently high gasoline prices are a financial challenge for many Americans and disproportionately impact lower-earning Americans, who are more likely to spend a greater share of their annual income on gasoline.
Oil companies, on the other hand, are making significant profits, with the six companies testifying at Wednesday’s hearing collectively generating more than $76 billion in profit in 2021.
The Biden administration has responded to the situation by taking steps to mitigate the effects of low oil supply and high prices.
In November, the administration announced that it would release 50 million barrels of oil from the Strategic Petroleum Reserve to drive up oil supply.
In response to Russia’s invasion of Ukraine, on March 1, the administration released an additional 30 million barrels from the SPR in coordination with other International Energy Agency countries, and on March 31, the White House announced plans to release one million barrels of oil per day from the SPR for the next six months.
In addition to these moves, the Biden administration has urged the Federal Trade Commission to investigate allegations of anti-competitive activity in the oil and gas industry, and it has invoked the Defense Production Act to ensure a secure supply of five critical minerals used in the production of batteries for electric vehicles, grid storage and similar uses.
The hearing will look at all of these measures and attempt to assess their effectiveness.
It will also consider the impact of complementary steps the administration has taken such as the recent, $3 billion expansion of the Weatherization Assistance Program, and the release of $5 billion through the National Electric Vehicle Infrastructure Formula program to build out a national electric vehicle charging network.
The committee will also attempt to formulate next steps Congress can take to roll back prices at the pump.
Among those scheduled to testify at the hearing are David Lawler chairman and president of bp America, Inc.; Michael K. Wirth, chairman and chief executive officer, Chevron Corporation; Richard Muncrief, president and CEO, Devon Energy Corporation; Darren Woods, chief executive officer of ExxonMobil; Scott Sheffield, chief executive officer, Pioneer Natural Resources; Gretchen Watkins, president of Shell USA, Inc. and H.R. McMaster, senior fellow at the Hoover Institution, Stanford University.
Dan can be reached at [email protected] and at https://twitter.com/DanMcCue.