Western lawmakers seek probe of refineries

WASHINGTON, D.C. — U.S. Sens. Patty Murray and Maria Cantwell are joining Democratic senators from Oregon and California in asking the Justice Department to do a “refinery-by-refinery probe” into what caused gas prices to shoot past $4 per gallon in May and October.

A letter by the six senators cites a McCullough Research report released Nov. 15 in conjunction with a California state Senate hearing that showed the price spikes in May and October occurred while crude oil prices were declining and inventories were increasing, possibly in conjunction with misleading market information. The report also shows some West Coast oil refineries may have been producing oil last May despite public reports they were closed for maintenance, according to a news release from Cantwell’s office.

“It is important to note that because the West Coast refinery market is highly concentrated and isolated, inaccurate information about just one refinery being down can impact gasoline prices for tens of millions of consumers,” the letter from the senators said. “Taken together we believe these facts paint a picture of a highly unusual set of concurrent events in West Coast petroleum markets. Given the hit to American families and businesses from gasoline price spikes, we urge the Working Group to use every existing authority and regulation to identify, stop, and prosecute any and all instances of false reporting, manipulation, or anti-competitive behavior in the West Coast wholesale petroleum markets.”

Attorney General Eric Holder convened an Oil and Gas Price Fraud Working Group last year, but the senators say they “see scant evidence that its members are policing these markets as required by law or cracking down on other practices that may be illegal and hurting consumers.”

The senators said records that only can be gained through subpoena can determine whether various refinery companies violated a Federal Trade Commission rule against “false or misleading public announcements of planned pricing or output decisions.” Violations of the rule subject companies to fines of up to $1 million a day per violation.

The other senators signing the letter were Ron Wyden and Jeff Merkley of Oregon, and Dianne Feinstein and Barbara Boxer of California.