"We know what price gouging is about, and we've experienced it, and there's no reason in the world why the president of the United States of America can't use his bully pulpit to take on these companies," Wellstone said Wednesday.

Bush, speaking to reporters later in the day, said he would ask the Federal Trade Commission (FTC) to monitor complaints of price gouging, saying "We can make sure that no entity can legally overcharge."

But oil industry representatives immediately dismissed Wellstone's remarks as groundless, pointing to a March 30 FTC report that found no evidence of collusion or other anticompetitive conduct by the oil industry during last summer's Midwest gasoline price spikes.

"This was the umpteenth time that a state or federal agency has exonerated the industry from any suggestion of illegal activities," said Chris Kelley, a spokesman for the American Petroleum Institute, which represents the U.S. oil and gas industry. "This is what politicians always yell about when gas prices rise."

Wellstone said that while the March FTC report found no evidence of collusion, it illustrated how powerful oil interests can manipulate markets and limit supplies.

Producing less

Speaking in a conference call to Minnesota reporters, he cited a passage in the FTC study detailing how three unnamed Midwestern refiners curbed production in spring 2000 in the face of stricter Environmental Protection Agency (EPA) regulations for summer-grade gasoline:

"Three Midwest refiners independently concluded it was most profitable to limit capital expenditures to upgrade their refineries only to the extent necessary to supply their branded gas stations and contractual obligations," the report said.

The FTC study -- which was requested last year by Wellstone and other Minnesota legislators -- found that the three Midwest firms together produced 23 percent less summer-grade gasoline during the second quarter of 2000 than in 1999.

FTC spokesman Eric London said the investigation found that while many of the factors behind last year's Midwestern gas prices were beyond the control of the industry, some of the increases were due to "profit-maximizing strategies" by refineries.

Rayola Dougher, a policy analyst with the American Petroleum Institute, said the report merely found that the refineries consciously chose to invest in their most profitable product lines, which she called a "rational business decision."

The Bush energy plan being presented today in St. Paul is expected to tilt toward market solutions to build more refinery capacity to meet the nation's energy needs. But Wellstone and some other Democrats have said market solutions alone will not solve the immediate price crunch.

"Bush and Vice President Cheney have said this is the market, and there's not much they can do," he said. "But I'm calling on the president to use his bully pulpit to bring down these spiraling gas prices that are hitting consumers' pocketbooks in Minnesota."

Bush explicitly rejected price limits Wednesday.

Said Wellstone: "I'm calling on the president to lay out an energy policy that works for Minnesota, since he'll be visiting our state."

© Copyright 2001 Star Tribune

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