Friday, May 23, 2008
The Federal Government of the United States of America has no such provisions. The reason is because we are not a Democracy, we are a Republic. The good news is as a nation, you can do something to change our elected government officials at the local, state and federal levels .
This November put aside your political party loyalty. Instead, vote for the person running against the incumbent. If we do this we will change the face of government officials bent on the power their seniority holds. A new person taking the office will have a fresh view on issues affecting all of us. A new person elected to office hopefully will not yet be corrupt; therefore, should be more willing to vote against issues backed by special interest groups. Most of these special interest groups are well versed on how gain a win for their cause by lining the pockets of long time incumbents.
The long time incumbents have the knowledge and power to stop progress and changes the newly elected bring to their respective offices.
It must make you angry when you hear about officials of our government getting caught taking money from big companies. An example of this happened just a few months ago when ATT paid three congressmen $200,000 to go against Google in a recent auction of airwaves for new cell phone frequencies.
My point is not just the Big 5 Oil Companies control our elected officials, but, many lobbyists have been successful at doing the same thing. This leaves only one action we as a voting nation can do.
This November vote for the person running against an incumbent. Then in two years do it again and again and again until all the power held by a few is gone. At that point we should have a new government without all the baggage the incumbents bring to their respective offices.
With a new government body in place it should have the ability to clean up all the Federal Agencies. The political appointed upper management are power hungry, defiant, and work against the American Public. These appointees often remain in place from one administration to the next gaining more power and the temptation to use it to also benefit special interest groups.
One example of this would be the Veterans Administration, which pays it's employees bonuses based on the number of cases they finalize. By that I mean when a veteran files for service related disability benefits. The case agent assigned gets a bonus based on the number of cases processed each reporting period. It does not matter if they rule in favor of the veteran or deny the veterans claim. The case agent gets the credit for handling the claim. It is far easier for the agent to deny a veteran's case than to spend time to investigate the evidence and grant disability benefits to the veteran. The experienced case agent knows 80% of denied claims are never appealed. And, even if the Veteran does appeal the case the original agent still gets the credit for closing a case. It is a very bad system. Many Veterans are cheated from benefits for disabilities acquired while fighting for our freedom.
If you were to take the time to investigate any of the federal agencies most likely the same scenario will be repeated over and over again.
Enough is Enough - Vote for Change
" Gasoline Prices: A Case of Cheating, Not Competing" The story tells of the ways the Big 5 Oil Companies control supply and prices. The facts given are another source confirming what we all know the Big 5 will do to take unearned money from you and me.
The problem is we, as individuals, are completely at their mercy. We are unable to do anything to protect ourselves from this form of theft from our pocket books. Yes, I said theft. When a company cooks the books, manipulates, supply, lies about the actual cost and availability of product additives just to increase prices at the pump it is theft of our money.
Read the full story below. Then help me help you by coming back to my blog and read more of my posts.
Published on Thursday, March 11, 2004 by the Los Angeles Times
Sound familiar? Think back to the electricity crisis
by Jamie Court and Tim Hamilton
Tuesday, May 20, 2008
Congress also insisted that a separate independent regulatory body be retained, and the Federal Energy Regulatory Commission was formed from the old Federal Power Commission. FERC is an independent regulatory agency within the United States Department of Energy. Neither the US President nor Congress review FERC decisions. However, all FERC decisions are reviewable by the federal courts.
In the 1977 Act the FERC was also given added responsibility to hear appeals of DOE oil price control determinations. The DOE Act also transferred the regulation of interstate oil pipelines to FERC.
The Energy Policy Act of 2005 expanded FERC's authority to impose mandatory rules to perform and maintain its functions in routine circumstances, as well as hostile or unexpected circumstances on the bulk transmission system and to impose penalties on entities that manipulate the electricity and natural gas markets. This makes one wonder why the FERC has no authority to oversee the gasoline and diesel pipeline distribution system.
The FERC regulates the transmission and sale of natural gas for resale in interstate commerce and regulates the transmission of oil by pipelines in interstate commerce.
The FERC approves the siting of and abandonment of interstate natural gas facilities, including pipelines, storage and liquefied natural gas, but not distribution and retail sales of gasoline and diesel.
If the DOE and the FERC were created to protect US Citizens from energy industries it would only be logical to control and regulate the largest segment of energy consumed by the American public.
Many of you must feel as though the Big 5 oil companies underhandedly control this branch of the Federal Government. If the DOE Act and FERC really do regulate Energy how is it possible for the energy we put into our tanks today not fall under their jurisdiction?
Isn’t it about time we all stand up as one large group this November and say “Enough IS Enough”. Then do the only thing we can do, VOTE TO REGULATE GAS PRICES.
Think about it; then read the testimony of Timothy A Hamilton, before the Senate Judiciary Committee in Washington, DC on February 1, 2006.
Senate Judiciary Committee
Washington, DC February 1, 2006
Mr. Chairman, Honorable Members of the Committee, for the record my
name is Tim Hamilton. I am the Executive Director of AUTO, a non-profit
trade association of independent gasoline wholesalers and retailers that
operate approximately 400 gasoline service stations and convenience
stores in Washington State. I also serve as a consultant in the
industry advising small businesses, trade groups, state government, and
consumer groups such as the Foundation for Taxpayer and Consumer Rights
(FTCR) based in Santa Monica, CA.
My career in the industry began when I bought my first Exxon gasoline
station in 1974 in McCleary, Washington. When I tried to order my first load of gasoline Exxon refused to deliver and our little town experienced the gas lines of the Arab Oil Embargo era previously only seen on television. I subsequently operated a Shell station near Aberdeen where I experienced the reappearance of gas lines a second time in 1980. The last station I operated was a Union 76 station in our state capitol of Olympia.
I appreciate the invitation to testify before the committee. At least in my industry, I believe it extremely important that public policy makers recognize that the federal antitrust laws no longer provide the protections anticipated by its drafters.
Decades of consolidation, regulatory lobbying and legal maneuvering by the industry following federal decontrol in 1981 has resulted in formation of international corporations that dwarf the Standard Oil Trust and other monopolies that gave birth to the antitrust concept. One can hardly criticize the drafters for failing to anticipate the evolution of PC computers, internet communications and other modern technology that currently allows the industry to legally use tacit collusion that nearly mirrors the monopolistic powers of the Standard Oil Trust. The same applies to envisioning that the industry would use environmental initiatives to meet, divide up markets, and create barriers to entry and other anti-competitive institutions.
My career in governmental affairs and public policy began in 1984 when I formed AUTO and lobbied passage of the Washington Gasoline Dealers Bill of Rights (RCW 19.120). Since then I have experienced near continuous interaction in industry litigations, antitrust regulatory actions, and responded to requests for assistance from federal, state, and local elected officials in WA, OR, HI, CA, AZ, NV, MT, MI, and the Provincial Governments in Quebec and Nova Scotia. I sat on the California Attorney General's Task Force on Gasoline Prices and provided expertise to the California Energy Commission.
During regulatory reviews of mergers and acquisitions in the industry, I often interacted with the Merger and Acquisition Division of the FTC. The experience was disturbing as antitrust theories of the FTC often lacked common sense. As an example, one FTC counsel explained to me that if one company controlled every gas station in WA, OR, and CA the FTC would not object and further more, they wouldn't want to even know about it.
The mergers and acquisitions occurring within the petroleum industry has greatly reduced competition between oil companies. The first region to fully feel the effects was the West. The competitive decline created an oligopoly, which is defined as "A market condition in which sellers are so few that the actions of any one of them will materially affect price and have a measurable impact on competitors."
The failure of federal antitrust law to fully consider all the impacts of a worldwide merger has been troubling as well. The review process concentrates on the combined market share created by a consolidation of assets of the two companies in a particular region. If the consolidation exceeds a certain level, divestitures are required to bring the number in line with antitrust review levels adopted in the 80's. Seeming missing from this exercise was recognition that these mergers could create economic incentives for oil companies to create artificial shortages that resulted in regional price spikes that inflated company profits.
Using BP's acquisition of Amoco and ARCO as an example, prior to the merger if ARCO or other refiners in the West failed to provide enough gasoline or diesel the price would rise. The increase in price created a financial incentive for those not doing business in the region to ship in gasoline. AMOCO could ship in supplies from the Midwest and BP could bring it from refineries in the Far East. The same example applies to ConocoPhillips, which were Conoco, Phillips 66, and Union 76 prior to their mergers.
Following the mergers, BP lost the financial incentive to ship in gasoline from its previously acquired Amoco refineries in the Midwest during a price spike in the West. Such an action would undermine the higher price the company was receiving for gasoline made in its newly acquired Arco refineries in LA and Puget Sound. The same would occur for the managers at ConocoPhillips who be reluctant to ship in gasoline in amounts adequate to lower the prices as it would be enjoying increase margins at the former Union 76 refineries it acquired in LA and San Francisco.
The same problem exists when antitrust reviews fail to consider the international effects. The oil companies haven't built a new refinery in the U.S. in 30 years even though consumption has increased by 33 percent. The industry is quick to point out difficulties complying with environmental standards. Yet, the companies fail to mention new refineries that could supply the needs of the Americas were not built in Canada, Latin America, or South America.
As an example, Shell sold half its Deerpark refinery in Houston, Texas to the government of Mexico. Instead of a new Mexican refinery supplying gas and diesel to the U.S. market, over a million gallons of unleaded fuel per day flowed out of Houston to eastern ports in Mexico before and after Katrina. Out West where farmers, loggers, and truckers were painfully paying over $3 per gallon for diesel, cargoes from refineries in WA, CA, and HI cruised south to unload in Mexican ports on the Pacific side.
A key ingredient for success was the removal of the refinery surplus existing in the U.S. at the time of decontrol. An internal Chevron memo publicly released by Senator Ron Wyden acknowledged the industry goals with "A senior energy analyst at the recent API convention warned that if the US petroleum industry doesn't reduce its refining capacity it will never see any substantial increase in refinery margins." Similar memos from Texaco and Mobil discussed how the larger companies were closing down their refineries. The combined weight of the large companies was utilized to lobby for technical language in environmental rules that would discourage smaller competitors from operating refineries reduce supply by limiting competition from alternative fuels.
It is hard to believe drafters of antitrust laws envisioned an environmental regulatory process where a handful of companies could knowingly and legally sit down together in a "smoke-free room" to discuss limiting supply and competition. I am convinced that while unsuspecting regulatory staff acted as meeting facilitators, the industry used the opportunity to reached understandings on refinery retrofits that limited local refinery production and created barriers to entry for competitors.
Today, the industry acts in unison to limit supply as a means to drive up price. A key component is the large shared storage tank located near a refinery, pipeline, or seaport terminal where the companies commingle their gasoline or diesel. The companies use a complicated formula of contracts or exchange agreements to divide up the supplies produced locally or imported into the area. Computers at each company track the fuel supply of not only their inventory, but also the inventory of competitors throughout the entire region. Shipping and pipeline schedules are tracked to show when and where fuel will be exported or imported, the volumes involved, the impact on local inventories and the identification of the industry participant.
One company on its own or in concert with others can export, delay or divert scheduled imports, or cut back production at a local refinery. This independent actions draws down their portion of the supply in the shared tank. All the competitors are aware of the shortfalls (often even before event occurs). The initiating company then starts raising prices directly or indirectly to its gasoline stations. Utilizing third party reporting services and internet technology, the other companies immediately recognize a price spike is underway and counter with increases of wholesale prices to their stations operators. Sometimes gasoline marketers will receive up to four changes in price in a single 24-hour period.
As the companies monitor each price increase from competitors on their computer screens, consumers see pump prices skyrocket across the region and complain bitterly of price fixing. Elected officials turn to the Federal Trade Commission (FTC) asking for investigations. The FTC typically issues a study report stating no illegal behavior was found and the oil companies kick out press releases proclaiming how "we didn't do anything wrong!"
Prior to Katrina, one of the best examples outside of the West occurred in the Midwest in 2000. A study I conducted with FTCR looked into the price run up in the Midwest following the introduction of an ethanol blend of cleaner burning fuel. The study concluded the companies profited by the price spike, which could have been avoided, if the companies had not taken measures to "short the market". While the American Petroleum Institute issued a press release severely criticizing my conclusions, a short time later the Wall Street Journal, a Senate Investigation, and a reluctant sounding FTC independently seemed to confirm my observations of the following:
- the companies lowered historical gasoline production in the area following meetings and negotiations with the regulatory community on retrofitting refineries;
- the companies dramatically reduced local inventories in the shared tanks which triggered a price spike to slow consumption down to meet available supply; and
- at least one company admitted it intentionally withheld supplies available at its refinery outside the region to avoid undermining the high prices it was receiving at its Great Lakes region refinery.
Our trade group first raised public attention to the exporting when it published an article titled "The parade of ships" in 1997. The article documented how the companies loaded ships with gasoline and nearly before the ships cleared the harbors in Seattle, San Francisco, and Los Angeles the price spiked at the pump across the West. Chevron and others placed distributors on allocation and limited deliveries to gas stations. I provided all the information to the FTC including the names of the ships and the jumps in price in a letter dated 9/19/97 and received the expected thank you followed by no further response.
In 2004, the Orange County Register did a similar story as the companies admitted gasoline that could have been sold in the West found its way across the Pacific right before the spring drive. Not to be outdone, the LA Times reported how cargoes of ultra low sulfur diesel was exported out of CA to Chile in June of 2005 when diesel prices in the West were setting all time records.
It is important to note that very little trade secrets exist in the production and distribution of motor fuel. Rest assured, all of the oil companies can track their competitors exports, monitor refinery production levels, recognize the diversion of import cargoes to other locations and all the other factors that effect availability of supply and the price at the pump. The primary motivation for the companies claiming a need for confidentiality is to insure that the public is kept in the dark.
A CLASSIC EXAMPLE of frustration with antitrust law is the recent attempt by Shell Oil to close its highly profitable refinery in Bakersfield, California. Already short on fuel and home to some of the highest prices for diesel and gasoline, Shell attempted to bulldoze the refinery rather than sell it. During initial open meetings with effected employees, the Shell spokesman claimed the company would never sell the plant. The bulldozing was desired to prevent a new competitor from entering the market. The company claimed the decrease in production at Bakersfield was expected to increase profits for Shell at its remaining refineries in Puget Sound, Los Angeles, and San Francisco.
Shell's intentions alarmed the entire West. Elected officials pushed Shell to sell the refinery rather than close it and some asked the FTC to investigate. The company claimed it was losing money in Bakersfield and its wells in nearby California fields were running dry. The FTC agreed to investigate and announced its report would be completed sometime after Shell was scheduled to send the bulldozers through the refinery.
The company was obviously "disappointed" that its employees disclosed the internal documents. After watching television broadcasts throughout California featuring interviews with employees sitting behind dark curtains explaining the companies intentions, Shell eventually sold the refinery to Flying J.
Ironically, the FTC subsequently issued an investigation report that seems to state that federal antitrust laws do not apply when a company decides to close a production facility. Fortunately, the report was not released until after the efforts spearheaded by California Attorney General resulted in a sale to a new operator. The FTC report encourage others to attempt to close refineries in the U.S. and if such occurs, undoubtedly cast a large shadow on any attempts by state AGs to protect regional supplies of gasoline or diesel.
As major participant in the debate, I personally feel that if the FTC had completed its efforts before Shell inked a deal with Flying J, the state of California could have found its legal position undermined by the FTC report. Ironically, my reading of the FTC report on Bakersfield finds it went beyond just explaining the limitations of existing laws in such matters. The report seems to attempt to provide Shell a public relations defense for its actions, which if correct is a disturbing testament to its orientation.
Often I am asked "How high will the prices go". My first response is to return a question with "Well, how much will you pay to get to work when the gas gauge is on empty?" I then add "Can't tell for sure, but one thing for certain is the oil companies are going to take this country on one heck of a ride over the next 5-10 years."
Source of above transcript
Sunday, April 27, 2008
Speaking at a gas station on April 25 Barack Obama stated "The candidates with the
Obama asked "So what have we got to show for all that experience?” his answer was "Gas that's approaching $4 a gallon. He then stated “This country didn't raise fuel efficiency standards for over 30 years."
Obama stated because of the do nothing attitude consumers are suffering. He is right that we the American public are suffering, but, the real truth is we are being gouged by the Big 5 oil companies and the day traders hedging their bets on the oil market.
Day traders may be the real problem with the price we must pay at the pump today. They are driven by greed just as the big 5 oil companies.
Obama also stated soaring gas prices are the latest manifestation of a
"In the end, we'll only ease the burden of gas prices on our families when people all across
I have been saying “Enough is Enough” in my blog posts all along. Glad to see someone else is at least feeling the same way. However, last time I checked his title it said US Senator. Does that also mean we are just hearing more rhetoric from a public official running for office?
At least one very public official dares to say something about our prices at the pump. Wouldn’t it be great if one person could bring about change? Well one person can not do it alone. One person can, however, get others to join the cause and get this great nation off their proverbial butts. I say “treat oil and fuel as they should be treated, a utility the entire country is dependent upon”.
Please help me help you and “Vote to Regulate Gas Prices”
Saturday, April 19, 2008
Today while I was searching the net I came across the testimony of Timothy A Hamilton, before the Senate Judiciary Committee in
This is a link to the full story.
His remarks point out the ability of the major oil companies to control the availability and price we pay at the pump. Mr. Hamilton has been the gas station retail business since 1974. His experiences led him to a career change to become involved in governmental affairs and public policy in 1984 when he formed a non-profit trade association of independent gasoline wholesalers and retailers that operate approximately 400 gasoline service stations and convenience stores in
Mr. Hamilton states in his testimony “Decades of consolidation, regulatory lobbying and legal maneuvering by the industry following federal decontrol in 1981 has resulted in formation of international corporations that dwarf the Standard Oil Trust and other monopolies that gave birth to the antitrust concept. One can hardly criticize the drafters for failing to anticipate the evolution of PC computers, internet communications and other modern technology that currently allows the industry to legally use tacit collusion that nearly mirrors the monopolistic powers of the Standard Oil Trust. The same applies to envisioning that the industry would use environmental initiatives to meet, divide up markets, and create barriers to entry and other anti-competitive institutions.
That is one refinery saved, one burned down and one blown up in the past few years. It does seem like the “Big 5” still prevail in their efforts to gouge the American public. When will you, my readers, say “Enough is Enough” and help launch this grass roots effort to “Vote to Regulate Gas Prices”.
People, I do not know the answers. I do, however, see the problem. We can all try to conserve our fuel consumption, but, as Mr. Hamilton testified the “Big 5” will just reduce the available supply.
We must have regulation to control prices at the pump. By not controlling the price at the pump everything we buy, every service we need must also increase prices due to the trickle down affect. To minimize the trickle down affect other companies must cut expenses wherever possible. That means fewer pay increases, increases in off shore manufacturing of goods to reduce labor costs, which in turn means fewer
The “Big 5” has tipped the first domino in a complex
Friday, April 11, 2008
I believe our elected government is no longer a true representation of the American citizens needs. I believe our system for electing government lawmakers at every level from local political subdivisions such as township boards, cities, and counties, to state and federal levels are in need of a complete overhaul.
I believe all elected officials should never be allowed to hold more than two terms in office. I believe the US Senate should be limited to two terms of four years each. And, those terms for each senator representing a specific state should not be in the same election as a
I believe the same term limitations should be adopted by each state for their respective state legislative positions. All local and county political subdivisions should have a two term limitation.
I believe by doing the above our government will no longer be stagnant. Special interest groups and professional lobbyists will loose a great deal of the “good old boy” influence currently held with the career politicians holding the same office for years and years. Yes, I am talking about the federal, state, county, city and township officials holding office for 10 or more years. Holding any office for such a long term becomes an office of power and out of touch with the real world we all live in. One must live in private life to get in touch with reality.
Even the most well intentioned elected official at some point becomes closed minded on issues and fails to really represent the will of the people. They end up representing their own agenda, one which is often based on their own special interests or those of lobbying professionals.
My beliefs on this subject mater are based on my 58 years of life experience dealing with local, county, state and federal elected officials. Watching our elected career political officials in action has taught me how corrupt and yielding to special interest groups all levels of government have become. I tell you that you would not believe just how much of your tax dollars are wasted on product procurement based on name brand loyalty. The only way to curb the power of the career political office is to change the person holding the office.
The time has come to put fresh ideas into an old and outdated electorial system. By doing so perhaps we, the American people, can get some controls on our run away petroleum price increases. I say “Enough is Enough” let us make changes and lets make them now!
Saturday, April 5, 2008
They state the concentration of economic power from the mergers of large oil companies is going to require new levels of government intervention in the marketplace. Mokhiber & Weissman (M&W) were correct when they stated the American public would enter an era of skyrocketing gasoline prices. What they did not say was that diesel prices would be escalating at even a higher rate.
M&W stated “Either the federal and state governments will act to break up monopolistic and oligopolistic corporations, or government agencies will assume regulatory authority of a kind largely abandoned in the
Early in 1999 when Exxon and Mobil merged a change in the structure of the industry occurred. Some analysts thought the trend toward lower gasoline prices and more efficient distribution of gasoline would be underway. In fact the reverse has been seen. Unjustified profit taking has been the result of industry concentration. With fewer oil companies the mergers of Exxon and Mobil, BP, Amoco and ARCO price-fixing is much easier. Most likely this is accomplished through overt or illegal agreements.
In 2000 M&W stated “With oil prices skyrocketing nationwide, prices spiking in the
The oil industry over the years has mastered the ability of rationalizing the sudden jump in gas prices. In reality, the oil industry’s public remarks are nothing more than a cover-up of gouging the American Public.
Whether current fast rising prices at the pump are collusive agreements or as M&W pointed to a "conscious parallelism". The lack of tough action by lawmakers has failed to uncover the truth, and, the current field of lawmakers most likely never will. So be it! Now is the time to vote to regulate prices we pay at the pump.
Why does congress fail to introduce legislation to protect the American public from the oil giants? Could it be big money somehow going to members of congress? Something for sure keeps these kinds of price increases intact and unchecked. Unless our federal government chooses to regulate Big Oil the trickle down effect on everything we buy will turn into a flowing river. Government statistics would have us believe runaway price increases at the pump do not cause price increases in other products we buy.
The time is now to do something about price controls. Why should the oil industry continue to self-regulate the price at the pump? Is it not about time for the federal government to take charge?
Only direct government regulation at the federal level will stop the runaway gouging. As long as the control over the price of gasoline and diesel remain in the hands of the major oil companies this practice will continue. Each oil company has the ability to influence prices at the pump and the rest of the oil companies are more than willing to follow suit in their determination to gouge the American public.
Friday, March 21, 2008
Politicians would have you believe gasoline, diesel and home heating fuel are free market consumables. The truth of the matter is our country runs on refined oil products. If the supply of refined petroleum was cut off right now our country would come to a complete standstill. Any product that can have such an impact on everyones quality of life needs to be considered a necessary utility. And, necessary utilities need to be regulated to assure sufficient availability to meet our needs at a fair price.
The article went on to point out the court's decision which suggested that it would uphold any state's pricing regulation of petroleum products, including home-heating oil.
The defeat of oil industry interests in 1988 was a victory for state regulators, however, no state has yet chosen to protect consumers from run-away profit taking. It is time for you to insist, through your vote, the federal government mandate such controls nation wide through legislation. Since states have not shown enough backbone to stand up and say "Enough is Enough" it is time for all of us to unite and say "Enough is Enough"