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NEW YORK (CNN/Money) -
Asking fellow senators to put finger-pointing over Hurricane Katrina's devastation aside, the head of the Senate Energy Committee called Tuesday for a gasoline and oil act to protect citizens from price gouging.
"Hurricane Katrina exposed the harsh reality that we have been skating on thin ice when it comes to this country's energy concentration in the Gulf Coast," said Energy Committee chair Senator Pete Domenici, Republican from New Mexico.
"Rising gasoline prices this year have been hurting consumers across the nation," he said in opening remarks during the afternoon's committee hearing to discuss the nation's looming energy crisis.
Testimony focused specifically on why gasoline prices are so high while oil companies make record profits; with a longterm goal to hammer out policies about price gouging, unfair speculation and what Senator Domenici called "unconscionable profiteering."
"The Federal Trade Commission is not specifically subject to the jurisdiction of this Committee, but any oil company that is price gouging will find themselves in those witness chairs where they will be made accountable," said Domenici.
The first panel slated to testify included Johnnie Burton, director of the Minerals Management Service, a unit of the Department of the Interior; Guy Caruso with the Energy Information Administration; and Dr. James Overdahl, chief economist with the Commodity Futures Trading Commission.
Committee Democrats said they are concerned about Americans struggling with soaring gas prices and high crude prices bankrupting the nation's airlines, while oil companies are making record profits.
Some Republicans said U.S. environmental laws are keeping the U.S. from producing additional fuel sources that would lower energy costs. Lisa Murkowski, Republican from Alaska, added that Hurricane Katrina showed the country that it is a vulnerability to keep all of our energy resources in one place.
Gas pains versus corporate gains
During his testimony before the Congressional panel, Caruso said that the latest weekly average retail price for a gallon of gasoline will be above $3 a gallon due to the impact of Hurricane Katrina on Gulf Coast refineries and pipelines, versus last week's $2.61 per gallon.
"We expect gasoline prices to ease off in coming weeks," Caruso added.
Moreover, he said that heating oil prices will be, on average, 30 percent higher than they were last year.
The CFTC's Overdahl told the Senate committee that, "Consumers of energy products, who are paying these higher prices, deserve to know that energy prices are being set fairly in an open and competitive environment."
But Democratic Senator Ron Wyden said the primary reason for sky-high prices is that "the government isn't in the consumer protection business anymore."
He added that, given the fact that oil companies are booking record profits, government is allowing corporate profits to take priority over the needs of U.S. citizens.
"It is hard to reconcile (massive corporate profits) when we all know the consumer is pushed to the brink," said Dianne Feinstein, Democrat from California.
She said she has urged the nation's top seven oil companies to implement voluntary price restraint, adding that the former President George Bush did so and that she hopes the current President Bush would be willing to do the same.
Gordon Smith, Republican senator from Oregon, in addressing the question of market manipulation and price gouging, said Americans have faith in the free market system, also fear they are being cheated.
He proposed creating a law that sets a benchmark price for gasoline, anything above which would trigger investigation into market manipulation.
A windfall profits rebate was proposed by a different senator, whereby oil companies give consumers a break and use their $80 billion in windfall profit to ease fuel costs for the public.
"Conservation is the best short-term measure we can take," said Johnnie Burton, echoing comments made by speakers from both sides of the aisle amid the debate over who was responsible for sky-high prices.
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