Even “Blockbuster” Congressional Report Doesn’t Show Evidence of Gas Price Gouging
Claims that oil and natural gas producers are price gouging have been met with swift rebuttal from experts across the country, but that hasn’t stopped members of Congress from pushing this narrative. That includes what is being hailed as a “blockbuster” report this week – despite presenting no evidence to support such claims.
Failing to conduct a simple internet search for news about U.S. gasoline prices, Rep. Bill Pascrell (D-N.J.) became the latest Democrat in Congress to push debunked gasoline price gouging claims, seemingly oblivious to the multitude of independent experts who have repeatedly rejected these accusations.
Pascrell recently sent out a hyperbolic press release filled with gasoline price gouging claims touting a “blockbuster” report he published in his role as Chair of the U.S. House Ways & Means Oversight Subcommittee. The release claims that the new report details widespread “gas gouging by large oil companies awash in record-setting profits.” Going a step further, the release accuses “big oil” of “deliberately keeping production low” to keep “prices and profits sky-high.”
Apparently, Pascrell doesn’t appreciate the irony of issuing a press release accusing the industry of suppressing production while featuring a quote from the New Jersey League of Conservation Voters – an organization which doesn’t hide its disdain for the U.S. oil and natural gas industry.
From the press release, it would seem that Pascrell’s report – which results from his March 2022 “demand” that oil companies answer to claims of price gouging – backs up novel accusations of energy market manipulation. However, the report linked in the press release doesn’t even make a single accusation of gasoline price gouging, nor are there any less direct claims of industry malpractice: a CTRL+F search for “price gouging” only turns up two references to H.R. 7699, the Consumer Fuel Price Gouging Prevention Act.
While the press release makes broad claims about price gouging and deliberate suppression of supply, these allegations have no basis in reality – whether it be in the report itself or elsewhere in the media. Instead, the report is merely a summary of economic activity over the past two years. It describes the war in Ukraine, the demand destruction brought on by the COVID pandemic and the surging energy prices that resulted from resurrected economies, and also includes blinded responses from major energy companies addressing Pascrell’s earlier “demand” for answers.
If anything, Pascrell’s report artfully demonstrates that the oil and natural gas industry is defined by highs and lows, as Energy In Depth and CNN pointed out last month when many energy companies reported their quarterly earnings:
Pascrell’s report even includes a chart sourced from the Congressional Research Service (Table 2. Total Revenue) showing that industry revenue plummeted during 2020 before recovering in 2021 and 2022. The data points out that in 2020, major energy companies reported “substantially less revenue and cash flow” and higher net debt than in previous years.
So, why didn’t Pascrell’s report itself actually make a claim of gasoline price gouging? Because there is no evidence that such practice exists – a fact that can be easily confirmed by a quick internet search that will turn up plenty of experts debunking these claims.
Patrick De Haan, GasBuddy:
“Oil companies don’t get to decide what to sell their oil at. Oil prices are decided by (global) buyers and sellers.”
Garrett Golding, Dallas Federal Reserve Bank:
“It’s not price gouging or a grand plot by the industry. This is how the business functions.”
Bob McNally, Rapidan Energy:
“There’s always a multi-week lag between global crude oil and domestic pump price changes, Mr. President…Gouging is not an issue, sir.”
Phil Verleger from the Niskanen Institute cited more than 100 investigations and lawsuits brought on by everyone from consumers to the FTC and numerous attorneys general over the last 30 years that all “flopped”, saying:
“There’s no such thing as price gouging.”
“Democrats blame oil companies for high fuel prices. But the facts don’t back them up.”
“Democratic leadership has also sought to blame oil companies for high gas prices, a growing concern for voters ahead of the midterm elections, despite no evidence of price gouging.”
Ironically, Pascrell also included a report from the Congressional Research Service, produced at the request of his office, that completely undercuts his own report. CRS dismissed the ideas that oil companies control prices, writing:
“Gasoline and other petroleum product prices paid by U.S. consumers are a function of numerous market and financial variables.”
In response to Pascrell’s report, Jeff Eshelman, Chief Operating Officer of the Independent Petroleum Association of America issued the following statement:
“Independent experts and even members of the Biden administration have repeatedly said that gasoline price gouging isn’t happening. A 30 second search on Google pulls up countless fact checks that show the claim is false. Even Rep. Pascrell’s report doesn’t support the claim – it’s just a bunch of charts and stats summarizing the highs and lows of the energy business, including the fact that oil companies suffered massive losses in 2020. Curiously, Rep. Pascrell’s own report references a CRS analysis he requested that contradicts his simplistic narrative.”
Economic experts’ unequivocal denial of gas price gouging didn’t stop Pascrell from publishing a press release that substantially exaggerates the findings in the report. Instead, Pascrell decided to announce the release of his “blockbuster” price gouging report in front of a New Jersey gas station, on the same day that marked the longest continuous decline in gas prices since 2005.
Adding to the mixed messages, Pascrell’s press release levies unfounded accusations of energy supply suppression right before including a quote of endorsement from the League of Conservation Voters, a group intent on putting a stop to the production and use of oil and natural gas. Like Congressional Democrats’ previous allegations of price gouging, it’s clear that this most recent effort is nothing but another messaging push.