United States Refinery Revitalization Act of 2004

UNITED STATES REFINERY REVITALIZATION ACT OF 2004 -- (House of Representatives - June 16, 2004)

Mr. BARTON of Texas. Mr. Speaker, pursuant to House Resolution 671, I call up the bill (H.R. 4517) to provide incentives to increase refinery capacity in the United States, and ask for its immediate consideration.

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Mr. MARKEY. Mr. Speaker, this bill is part of a continuing pattern where the Republican majority shuts out the Democratic Party. But more importantly, they shut out, yes, the American public. No hearings on this bill. No discussion on this bill. No involvement of the American public in discussing a bill which could have profound impact on the environment and the health of Americans all across our country. It is a continuing pattern of disrespect for the American public that they are not able to have hearings on issues that are so central to their families' environmental and health care well-being.

They bring it out here to the floor and what do they say to the Democratic Party and, yes, to the American people? There are no amendments that can be made to this bill. We have conceived it in secret and we are going to pass it without amendment or without discussion, and that is the height of political arrogance because it leaves out the American people from the discussion. It assumes that a small number of oil company executives working with members of the Republican Party can decide what is best for our country, when obviously it is pretty evident from all of the higher gas prices and the mess that we have got in the country that that is not the best way to go, that the American people should be involved.

What do they say? They say we need this bill, quote/unquote, to revitalize the refining industry. Well, today the biggest oil refiners in the United States are Exxon-Mobil, Conoco-Phillips, BP, Valero and Royal Dutch Shell. Together they comprise 50 percent of domestic refinery capacity in the United States. Ten years ago they only controlled about a third of domestic refinery capacity.

So how are they doing with this incredible increase that they have had over the last few years? Well, Valero Energy Corporation reported record earnings in its April 2004 quarterly report. Here is what they said. "With respect to refined product fundamentals, gasoline margins remain at record levels. As we look at the balance of 2004, it is obvious that this is going to be another year of record earnings for us," the Valero Refining Company.

That is great news if you are a Valero Energy shareholder. What about all the American gasoline consumers? Why has it not been great for them? What about other refiners? Perhaps they are hurting as well. Let us find out.

Let us look at Exxon-Mobil's May 2004 quarterly report. Here is what they have to say about themselves. U.S. downstream earnings were $393 million, up $218 million mainly due to higher refining margins.

Great news for Exxon-Mobil shareholders. Their investment does not seem like it needs to be revitalized much if they have had more than a doubling of their revenues.

Well, how about Conoco-Phillips, how are they doing? Guess what? There is good news again. Here is what Conoco-Phillips had to report in their April 2004 quarterly report. Refining and marketing income from continuing operations was up $464 million, up from $202 million in the previous quarter and $389 million in the first quarter of 2003. Improvements over the fourth quarter of 2003 were primarily driven by higher refining margins. These improvements were partially offset by lower U.S. retail and wholesale marketing margins. The improved results from the first quarter of 2003 were attributable to higher U.S. refining margins and volumes, partially offset by lower U.S. retail and wholesale marketing margins.

Now, I could go through BP, which once again makes the same point. How about Royal Dutch Shell? Again, they are making the same point. Shell, Shell says that they are watching increased margins.

Not so great news for the consumer but great news for each one of those oil companies.

So your question, I guess, is why do they not take all these profits and expand their refining capacity? Why do they not just, rather than blaming it on the environment and the health care laws of the United States, just take all these huge profits that they get from tipping the American consumer upside down and shaking money out of their pockets and improve them?

I will tell you why they do not do that. They do not do that because they do not want to call upon the Justice Department. They do not want to call upon the Federal Trade Commission to look at the incredible consolidation that has occurred in the refining industry over the last 10 years. They do not want to look at what happens when fewer and fewer companies control the refining industry and you wind up with a conscious or unconscious parallelism of interest, which essentially means they all have a stake in raising prices because there are so few of them and there are no other competitors out there who can act on behalf of consumers by lowering prices.

But for crying out loud, do not blame the health care laws that protect the American public. Do not blame the environmental laws. Blame these companies with record profits which do not want to expand the refining industry themselves.

Please, please, do not exclude the American public from the debate on this bill, have no questions asked, and then blame the laws that have been passed to protect their health and environment for what the refiners are doing in hurting the American consumer.

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