Officials Say State Can’t Do Much, but Idea of Oversight Stirs Interest

By Janie Har, The Oregonian, Portland, Ore.

Apr. 26–Despite rising frustration over gas prices, there is little the state can do to help consumers at the pump, officials said Tuesday.

Republican gubernatorial hopeful Kevin Mannix fueled the debate Monday night when he called for tougher state government oversight of oil companies.

Under state law, the attorney general can investigate antitrust and unlawful trade violations by oil companies, but there is nothing on the books that allows the state to regulate gas prices.

“The challenge is demonstrating that either the big oil companies or the retailers are collaborating on the price,” said Kevin Neely, spokesman for Attorney General Hardy Myers.

Beyond that, he said, “There’s no law against making money.”

Mannix said during Monday’s televised Republican debate that he wants the Public Utility Commission to investigate why gasoline prices are rising. The commission regulates natural gas, electricity, telephones and private water companies, and it would need legislative approval to take on gasoline.

Until then, Mannix said, Democratic Gov. Ted Kulongoski should haul in oil executives and demand an explanation. In an interview Tuesday, Mannix would not define price gouging or call for price controls, and he emphasized he doesn’t know whether consumers are being ripped off.

“I’m a free-market person, but when you have a situation with a limited number of entrepreneurs providing an item which is of clear necessity to the public, . . . and the prices are increasing exponentially,” he said, you have to ask, “How can you justify this?”

Lisa Grove, spokeswoman for the Kulongoski campaign, said the governor is concerned, but he wants to make sure he’s got the authority before attempting to change any regulations. The federal government, she said, should take up these interstate commerce issues on a national level.

“There’s no question he’s concerned about the volatile nature of gas prices and the outrageous salaries CEOs are making and how much Oregonians are paying at the pump,” she said.

Oregon’s gasoline prices increased sharply — to an average price of $2.85 a gallon, an increase of 36 cents in the past month — but remained below the national average, according to the American Automobile Association. Mannix is correct that there are a small number of gas suppliers in Oregon, namely Chevron, Conoco Phillips, Exxon Mobil and Shell, said state Department of Energy Director Michael Grainey.

Public Utility Commission Chairman Lee Beyer sounded skeptical that the state panel could be effective in rooting out why prices are spiking.

“My guess is states would be rather ineffective because you’re talking about national companies and in many cases international companies, and I think it would be hard to get even the information to know,” he said.

Mannix’s call, however, intrigued Senate President Peter Courtney, D-Salem, and House Speaker Karen Minnis, R-Wood Village. Minnis said that she and Courtney are “exploring our options” on possible oversight.

Courtney said the state has little power over such companies, but when gas prices are nearing $3 a gallon for regular unleaded, it’s obvious that “we’re going to have to consider trying to figure out the legislation.”

Last session, the Legislature refused to pass a bill granting the attorney general limited authority to halt price gouging in the wake of an emergency. The proposal cleared the Democrat-controlled Senate but died in the Republican-led House.

Neely, with the attorney general’s office, said companies cannot collude to set prices and they cannot misrepresent prices. His office has investigated several claims over the past decade “and we have never been able to uncover any untoward action by the fuel companies,” he said.

At least one representative was unimpressed with Mannix’s calls for state oversight. Paul Romain, a lobbyist for the Oregon Petroleum Association, said the state can do nothing to control an industry subject to worldwide market fluctuations.

“This is just a stupid political statement,” he said, “by a candidate who’s desperate.”

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