Overnight Energy & Environment

Energy & Environment — House passes Democrats’ gasoline price-gouging bill

by Rachel Frazin and Zack Budryk 05/19/22 07:48 PM CDT

© The Hill illustration, Madeline Monroe, Greg Nash/iStock

The House narrowly passed a bill related to alleged price gouging, while Interior Secretary Deb Haaland announced that the department will soon propose an offshore oil and gas leasing plan.

This is Overnight Energy & Environment, your source for the latest news focused on energy, the environment and beyond. For The Hill, we’re Rachel Frazin and Zack Budryk. Someone forward you this newsletter? Subscribe here.

Price gouging bill narrowly approved by House

The House voted Thursday to pass Democrats’ bill aimed at combating alleged price gouging on gasoline.

The bill passed 217-207, with no Republicans voting for it and four Democrats voting against it:

Stephanie Murphy (Fla.)
Lizzie Fletcher (Texas)
Kathleen Rice (N.Y.)
Jared Golden (Maine)

…but it’s not going anywhere: The legislation is unlikely to gain traction in the Senate, where it would need the support of 10 Republicans to advance, but it’s part of a major messaging push by Democrats as they try to blame the oil industry for skyrocketing prices.

Their claims of price gouging have been met with some skepticism from analysts, who have blamed market forces — rather than gouging — for high gasoline prices.

Still, Democrats point to record profits posted by major oil companies as evidence of an issue.

“What’s infuriating is that this is happening at the same time that gas and oil companies are raking in record profits and then putting those dollars into stock buybacks,” bill sponsor Rep. Kim Schrier (D-Wash.) said in a floor speech on Thursday.

So what exactly does the bill do? The legislation, from Schrier and Rep. Katie Porter (D-Calif.), would outlaw the selling of fuel at an “excessive” price during an energy emergency, though it does not detail any particular price threshold.

The bill would also empower the Federal Trade Commission (FTC) to pursue legal action if instances of price gouging are discovered.

Lawmakers also approved two additional amendments ahead of the final vote.

One, from Rep. Val Demings (D-Fla.) and others, would require the FTC to investigate whether the price of gasoline is being manipulated by reducing refinery capacity or other means.
The other, from Rep. Chris Pappas (D-N.H.), would create a new unit at the FTC tasked with monitoring fuel markets.

The backstory: Market analysts have said repeatedly that the high prices are being primarily driven by Russia’s invasion of Ukraine, as well as pandemic recovery.

Some said that the latest spike is related to factors including refiners shifting toward other, more profitable fuels.

WHAT’S WITH THE DEM ‘NO’ VOTES?

Democrats who voted against the bill said they didn’t believe it would resolve the current issues and raised concerns about potential shortages.

Murphy in a statement on Thursday said the price-gouging bill “takes the wrong approach,” claiming that it “could further reduce supply” and worsen the current situation.

“At best, this bill is a distraction that won’t actually address the problem. At worst, it could make the problem more severe,” Murphy wrote.

She also cited comments from Larry Summers, who served as Treasury secretary during the Clinton administration. Summers said the bill would not reduce inflation, but could “cause and contrive all kinds of shortages.”

Fletcher in a statement on Thursday said “this legislation is not the answer.”

“The Consumer Fuel Price Gouging Prevention Act would not fix high gasoline prices at the pump, and has the potential to exacerbate the supply shortage our country is facing, leading to even worse outcomes,” she wrote. “For these reasons, I voted no on this legislation today.”

Rice told The Hill in a statement that she objected to the bill because she is concerned that “it will not have any meaningful impact for consumers and could ultimately cause a chilling effect when we need to increase supply.”

Interior to propose offshore leasing plan by June 30

Interior Secretary Deb Haaland said Thursday that her department will propose a five-year schedule for offshore oil and gas by June 30, when the current program expires.

“The previous Administration stopped work on the new five-year plan in 2018, so there has been a lot to do to catch up. Varying, conflicting litigation has also been a factor,” Haaland said in testimony before the Senate Energy and Natural Resources Committee.

“As we take this next step, we will follow the science and the law, as we always do,” she added. …And she faced some heat on administration policy from Sen. Joe Manchin (D-W.Va.).

In the hearing on the Interior Department’s fiscal 2023 budget request, Manchin pushed back on the administration’s repeated references to the industry’s 9,000 unused leases to explain the energy crisis, arguing the administration has the power to pressure industry to use them.

“If the administration’s argument is that industry is sitting on these leases … why don’t they do something about it?” Manchin said. “For example, if the concern is that too many leases are not being developed in a timely manner, the department could increase the rental rates over time to provide a financial disincentive against holding leases for speculation alone.”

Manchin conceded that “new lease sales would not immediately increase production,” but claimed the administration’s focus on current production “puts America’s energy security at risk.”

FDA won’t totally ban phthalates in food packaging

The Food and Drug Administration (FDA) said Thursday that it will not impose a total ban on a set of dangerous chemicals commonly found in fast-food packaging, angering scientists and environmental groups who have long pressed for their removal.

The decision came in response to three separate petitions requesting that the FDA limit the use of compounds called phthalates, which are known to disrupt hormone function and have been linked to birth defects, infertility, learning disabilities and neurological disorders.

Despite proven negative health impacts, the compounds are still common ingredients in food packaging. Scientists have found that marginalized groups suffer disproportionately from the chemicals, partly because they consume more fast food.

What they did ban: The FDA on Thursday did institute a ban on the use of 23 phthalates for food contact applications, but it noted that those particular compounds had already “been abandoned” by manufacturers anyway. In taking its action, the FDA agreed to a July 2018 petition submitted by an industry group known as the Flexible Vinyl Alliance.

What they did not ban: The FDA will still allow the use of nine other similar compounds in food contact applications. And it denied a separate petition on Thursday from several environmental groups that had asked it to ban the 23 phthalates and an additional five from having food contact.

It said the organizations that had brought the petition, including the Natural Resources Defense Council, Earthjustice and the Environmental Defense Fund, “did not demonstrate that the proposed class of phthalates is no longer safe for the approved food additive uses.”

The FDA also denied another related petition — from some of the same environmental groups — that requested a ban on food contact use for certain phthalates and the revocation of previously sanctioned authorizations for others.

The FDA said it rejected this petition because it failed to “demonstrate through scientific data or information” that such a ban on phthalates was warranted.

Several groups in a research consortium called Project TENDR — Targeting Environmental Neuro-Developmental Risks — condemned the FDA’s decision.

“These chemicals are approved for their use, they have the ability to leach out of these products into the food, they’re ending up in our food in our bodies and are leading to serious and irreversible health effects,” said Ami Zota, an associate professor at the George Washington University’s Milken Institute School of Public Health who is a member of Project TENDR.

“That can affect the basics of human condition — like our ability to learn, our ability to have safe and healthy families,” she added. “And marginalized communities are disproportionately being burdened.”

CAPTURE THE MOMENT

The Biden administration announced on Thursday that it was launching a program that would put $3.5 billion toward the removal of carbon from Earth’s atmosphere.

The project in question, the Regional Direct Air Capture Hubs program, is funded under the bipartisan infrastructure law and will involve the construction of four regional hubs for carbon dioxide removal.

CO2 removal involves sucking carbon dioxide from the surrounding air and either storing it underground or using it for products that do not release it back into the air. It is a separate process from carbon capture, which aims to prevent the initial release of emissions outright.