This is a rush transcript from "Your World with Neil Cavuto," May 23, 2007. This copy may not be in its final form and may be updated.
NEIL CAVUTO, HOST: This is a FOX News alert. Days before the busy summer travel season, the House of Representatives approving a bill to make gas-gouging a federal crime, targeting big oil companies and gas station operators, and punishing them with jail and big fines for pushing up prices. Michigan Congressman Bart Stupak is leading that charge. Congressman, do you have proof there is gouging going on?
REP. BART STUPAK (D), MICHIGAN: Well, just take a look at the most recent report from the Federal Trade Commission on Hurricane Katrina. They have found at least 15 cases of price gouging in the gasoline area. But there was no federal law against it. Hopefully now the Senate will take up this legislation and there will be a law against it.
CAVUTO: But are you saying, Congressman, it is going on right now, that the prices are high because of the gouging?
STUPAK: Right now there is no doubt in my mind after the investigation — been working this issue for a long time, refineries are gouging the American people to the tune of the — profit spread on a barrel of oil to convert from oil to gas, it is $36. It should be $9. That is raping the American people.
CAVUTO: All right. So you don’t think it is raping the American people that we had too few refineries? And that is something you are in charge of, right? You guys in Congress are in charge of that.
STUPAK: No, no, no, no. The oil companies will decide when to build a refinery and when not to do a refinery. Congress does not run the refineries.
CAVUTO: No, no, no, no, no. Congressman.
STUPAK: A lot of us think we should.
CAVUTO: Congressman, you are not being fair or right. The fact of the matter is that…
STUPAK: How is this?
CAVUTO: …Oil companies and a lot of it — believe me, they are greedy and looking out for money, right?
CAVUTO: But they also want to build more refineries, but environmentalists and stiff requirements out of Congress are making it so tough they cannot do that.
STUPAK: Excuse me, but there has only been one refinery built since 1976, and only one permit was applied for, in Maricopa County, Arizona. It was approved based on air standards and everything in less than a year. And the oil companies have refused to build it.
CAVUTO: Wait a minute. Conoco wanted to build seven offshore facilities and was shut down by environmentalists at the time, seven, seven, when one company… Now let me ask you this.
STUPAK: Offshore — wait, wait.
CAVUTO: If they are doing that, Congressman, why do you turn it around and accept it as a given then that people are being deliberately gouged when you don’t seem to know for a fact they are?
STUPAK: We know for a fact they are. Look at the spreads, just…
CAVUTO: Prove it. Show it to me. Show it to me.
STUPAK: Let me answer it. And I can. OK? Come with me. Show what the profit margins on, again, converting a barrel of crude into gasoline is $9. Why is it $36 today? Why is it $36? They did not build a new refinery; they don’t need it to build new refineries. They need it because the getting is good with oil companies in the White House, and they are gouging the American people every opportunity they get. And no one is doing anything about it.
CAVUTO: All right. Do you know the price of a barrel of oil, sir?
STUPAK: Right now?
STUPAK: Right now it is $65 — approximately $65.
CAVUTO: All right. So who is setting that price for a barrel of oil?
STUPAK: Guess what the…
CAVUTO: Who is setting that price for a barrel of oil?
STUPAK: Guess what the price was last year this time, $70. Oil is actually down, not up. Why are prices up? Because they are trying to gouge us and take advantage of the American people. That is what is going on.
CAVUTO: All right. So the fact that demand has gone way up, that our economy is stronger, that more people are working, that more businesses are on-line, that productivity has gone up 22 percent in the last two years, you are saying that these are all outside aberrant factors and instead it is a bunch of evil guys colluding in a room?
STUPAK: No, no, no, no. What I am saying is refineries are taking advantage of the American people right now. And that is wrong. And Congress — two-thirds of my colleagues agree with me, we are going to put a stop to it.
CAVUTO: All right. Congressman, you say you were trying to do the American people good, would it not be good to start by telling them the truth, that the fact of the matter is the oil companies themselves, no saints, would love to build up refinery capacity, love to have that option to them because it would be able to produce more oil, and expensive oil, in a market that demands that oil. So they would get richer with the increased refinery capacity, not poorer. Why don’t you mention that?
STUPAK: Mr. Cavuto, have them come before us if you really believe that, because we have done hearings for the last two years on this. And only one application has ever been applied for. Only one. And it was approved.
CAVUTO: Congressman, the refinery capacity we have now has been the same it has essentially been for the last quarter of a century. So let me ask you this, what has made it more of an issue in the last few months? Why have these prices gone up more?
STUPAK: These outrageous prices, where Exxon Mobil makes $39.6 billion a year. That is $75,000 a minute. That is twice the average family income in my district, and why did gas go up in my district last night from $3.49 to $3.65? What event would trigger a 16 percent increase last night, other than greed?
CAVUTO: Well, you do know that oil trades on the markets; it is a commodity, right? Oil is now…
CAVUTO: …a commodity. It trades like a stock, right?
STUPAK: And you will be pleased to know that I have legislation to prevent unfair manipulation of prices, which requires oversight of all of those trades because the OTC, over-the-counter trades, are probably $20 a barrel too much. We are paying $20 too much.
CAVUTO: Congressman, let me ask you, when prices go way down.
STUPAK: Go ahead, I have to vote, but go ahead.
CAVUTO: When prices went way down, and when we were for a while experiencing $10 oil, and oil companies were laying people off, and a lot of companies were merging in that environment, and prices were ridiculously cheap, did you call for commissions and legislation to look into the mystery surrounding those cheap prices?
STUPAK: No, but Congress did.
CAVUTO: Or do you only do it when you think you can seize a P.R. moment and a good political pitch when they are high?
STUPAK: No. What Congress did, was actually did tax breaks for production, tax credits and things like this to help the oil companies. And now when they have record profits, we don’t think Congress should be giving them another $15 billion in tax breaks when they are making $40 billion.
CAVUTO: So when they weren’t making any money…
STUPAK: When they weren’t making…
CAVUTO: …You didn’t care. When they are, now you care?
STUPAK: You did not hear me. When they were having — struggling, we actually put in tax credits. I think it was Section 628 of the tax code, which allow them to write off all of those problems — costs to produce oil here in this country, to help them out. Congress has helped them out when need be. And now Congress has to tell them that enough is enough, and quit gouging the American people.
CAVUTO: Incredible, you keep saying it often enough people are going to accept it as fact, Congressman. But I think…
STUPAK: It is.
CAVUTO: …A little truth is in order. But, Congressman, I do want to get you back.
STUPAK: I’m chairman of Oversight and Investigations Committee. If you have contrary proof, I invite you to come to our committee and present it. We will be having more hearings on oil and gas in this country.
CAVUTO: I look forward to them, Congressman. Thank you very much.
STUPAK: Thank you.
CAVUTO: Congressman Stupak.
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