May 9, 2008
LANSING - Governor Jennifer M. Granholm today applauded Senators Carl Levin and Debbie Stabenow for introducing the Consumer-First Energy Act of 2008, a bill authored by Senate Majority Leader Harry Reid (D-NV) that would take long-needed federal action to combat the root causes of unconscionable gas prices, including the Bush administration's repeated protection of oil- industry profits over working families' budgets.
"If enacted, these and other new federal requirements would finally say "Enough!" on behalf of consumers who are feeling stretched beyond their financial breaking points," Granholm said. "Together with other actions recently taken by Congress to extend tax credits for renewable energy technologies, I believe Michigan's citizens and businesses would benefit from swift action to change course on seven years of ruinous federal energy policies while promoting wise investments in more abundant, low-carbon, home-grown energy resources."
The legislation takes aim at several practices that have allowed gas prices to reach and exceed unprecedented price levels. It is now not unusual to see some grades of gasoline priced over $4 per gallon. Specifically, the Consumer-First Energy Act would include:
- a new federal windfall profits tax on oil company profits that would help restrain relentless revenue gains during the past seven years;
- a roll-back of $17 billion worth of unneeded tax breaks for the oil industry, with a redirection of those dollars into renewable energy, energy efficiency, and consumer protection efforts;
- new federal authority to stop gas gouging to protect consumers from unconscionably excessive prices, as approved by Congress and rejected by President Bush; and
- limiting market-price speculation by prohibiting evasive off-shore sales transactions and requiring stricter federal regulatory oversight in the commodities markets. This provision would complement other efforts undertaken this week by Senator Levin to close the "Enron Loophole" (that exempts electronic energy markets for large traders from government oversight) and his request that President Bush appoint a federal task force to determine whether manipulative or deceptive commodity practices are raising gasoline and other energy prices.
Last month, the governor and Michigan Department of Agriculture (MDA) Director Don Kovisto outlined continued efforts to protect consumers' pocket books at the pump by re-directing the number of motor fuel quality inspectors to ensure that consumers are getting every penny's worth at the pump. Thanks to MDA's increased inspections, meter accuracy compliance for short measure has increase to 99 percent with overall compliance for all state requirements rising to 92 percent.
Last year, the governor provided testimony before the U.S. House Oversight and Investigations subcommittee and asked Congress to repeal unnecessary federal tax subsidies while ensuring price competition of unbranded gasoline. Additionally, Granholm, along with 20 other state governors, called on President Bush to urge oil companies to invest profits in fixing current refinery capacity issues to help lower prices at the pump.
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