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In article <bigeap$2sll$1@pencil.math.missouri.edu>, Joseph Malherek says...

*** Apologies for cross-posting ***
*** P R E S S    R E L E A S E ***

For Immediate Release: Aug. 26, 2003
Contact: Wenonah Hauter (202) 454-5150; Shannon Little (202) 588-7742

Skyrocketing Gas Prices Are Result of Consolidation of Big Oil
Companies and Opposition to Improved Fuel Economy Standards

WASHINGTON, D.C. - Record increases in gasoline prices are socking
Americans in the pocketbook as the Labor Day weekend approaches, but
instead of promoting policies that would moderate prices---such as
stronger fuel economy standards and tighter oversight of Big
Oil---Congress is steering toward passage of anti-consumer energy
legislation that would do little but shower billions in taxpayer
subsidies on energy companies.

The nationwide average price for gasoline soared to a new all-time
record on Monday, hitting $1.75 per gallon - just in time for one of the
heaviest driving seasons of the year.

Some industry analysts blame a broken pipeline in Arizona and the
temporary shutdown of seven refineries due to the massive electricity
blackout in the Northeast.  But such disruptions occur periodically and
would not cause this type of price spike if the government promoted
conservation and exercised proper oversight of the industry by, for
example, requiring oil companies to maintain minimum reserves and
adequate inventories.

A bigger problem, on the supply side, is industry consolidation that
gives a handful of companies tremendous pricing power through mechanisms
such as keeping inventories of crude oil and refined gasoline low in
advance of peak demand periods. On the demand side, the number of
gas-hogging sport utility vehicles has more than tripled since 1992 (to
nearly 22 million) and the number of pickup trucks has grown by 40
percent (to 38 million). But the federal government has not upgraded
fuel economy standards significantly since the 1970s, and the Senate
version of energy legislation contains new hurdles to raising those
standards.

The proliferation of SUVs and pickup trucks has reversed the course of
oil savings that began with the passage of Corporate Average Fuel
Economy (CAFE) standards in 1975, following the Arab oil embargoes. Even
though they are used much like cars, SUVs are treated as "light trucks"
and have more lenient fuel economy requirements.

"Strengthening fuel economy standards would make motorists and our
economy less vulnerable to supply disruptions, market manipulation and
price shocks," said Public Citizen President Joan Claybrook. "Congress
should be focusing on conservation, but instead it is pursuing an energy
bill that gives away billions in taxpayer dollars to big energy
companies with no savings for consumers or help for the environment."

In terms of gasoline consumption, the average 2002 model SUV uses 40
percent more gasoline than an average 2002 model car for a 100-mile
trip.  Largely as a result of the SUV proliferation, the average fuel
economy of the U.S. passenger vehicle fleet declined from 21.7 miles per
gallon (mpg) in 1992 to 20.4 mpg in 2002, the lowest level since 1981.
Less efficiency triggers greater demand for gasoline, putting pressure
on prices.

SUV owners also pay significantly more at the gas pumps.  With gas
prices at $1.66 per gallon (the average price on Aug. 25), the driver of
the average 2002 model SUV would pay $9.59 to drive 100 miles, while the
driver of an average 2002 car would pay $6.83.

On the supply side of the equation, as a result of mergers, the five
largest oil companies operating in the United States now control 61
percent of the domestic retail gasoline market, 48.5 percent of the
domestic oil refinery market and 50 percent of domestic oil exploration
and production. ExxonMobil, ChevronTexaco, ConocoPhillips, BP and Shell
also control 15 percent of the world's oil production. These top five
corporations now produce more oil everyday than Saudi Arabia, Kuwait and
Yemen combined.

"It is no surprise that gasoline prices are skyrocketing as we approach
Labor Day weekend," said Wenonah Hauter, director of Public Citizen's
Critical Mass Energy and Environment Program. "This is what you get when
you have a handful of mega-corporations dominating the market, and it is
what we predicted when the Federal Trade Commission (FTC) allowed
massive consolidation of the oil industry in 1999 and 2000."

These new mega-corporations are involved in all facets of the oil and
gas industry: exploration, production, refining, transportation and
retail sales. This vertical integration has resulted in a handful of
corporations controlling a substantial chunk of the domestic oil and gas
market, allowing them to artificially inflate prices and take advantage
of any supply disruptions by gouging consumers.

In March 2001, the FTC reached a curious conclusion about high gasoline
prices in the Midwest. While it claimed that no collusion had taken
place under current law, it found that "conscious (but independent)
choices by industry participants" to intentionally withhold supplies
resulted in artificially high prices. The report, however, did not
publicly name the names of the companies it alleged to have inflated
prices, since the FTC considered the information proprietary.

In response to this latest gasoline crunch, Public Citizen urges that:

- Congress raise CAFE standards for all passenger vehicles, including
SUVs, to 40 mpg, to be phased in by 2015;
- The federal government require oil companies to maintain sufficient
reserves and inventory to reduce price volatility;
- Congress immediately conduct hearings to determine the cause of price
spikes and conduct regular reviews of the status of competitive markets
in the oil industry; and,
- Congress reject the current energy legislation pending in a
House-Senate conference committee.

###

Public Citizen is a national, nonprofit consumer advocacy organization.
For more information on energy and other issues, visit www.citizen.org.

__________

[  F A C T S H E E T  ]

SUV and Pickup Gas Guzzling the "Driving Force" Behind Large U.S.
Appetite for Gas, Summer 2003 High Gas Prices

August 2003

SUVs and pickups are far less fuel efficient than are cars.  On
average, SUVs get seven fewer miles to each gallon of gasoline than cars
- pickups are even worse.  According to real-world data from
Environmental Protection Agency (EPA), 2002 SUVs average 17.3 miles per
gallon (mpg) and pickups average 16.5 mpg, while 2002 cars average 24.4
mpg.

- SUV and Pickup Owners Hit Hard by High Gas Prices:  With gas prices
currently at $1.66 for a gallon of regular gas,  a driver of the average
2002 SUV will pay $9.59 to drive 100 miles while the driver of an
average 2002 car will only pay $6.83.  In other words, the SUV driver
will pay 40 percent more than the car driver for the same trip.  Pickup
drivers would pay 47 percent more than car drivers, at over $10 for the
same 100 miles traveled.

- Premium Gasoline Costs Even More Exorbitant for SUV Owners:  Many, if
not all, new SUVs require premium gasoline, which is currently averaging
$1.83 per gallon.  With premium gasoline, a 100-mile-trip would cost an
SUV driver $10.58, or 55 percent more than what the driver of a car
using regular gasoline would have to pay.

- Over a Year, the Costs Add Up:  At current prices for gas, driving an
SUV or pickup instead of a car will cost owners between $415 and $530
extra over a year for gas.

- Gas Consumption by SUVs and Pickups Hundreds of Gallons More Than
Cars Per Year:  The average 2002 model SUV driver uses 40 percent more
gas than the average 2002 model car driver  5.78 gallons of gasoline
for a 100 mile trip instead of 4.12 gallons.  Pickups use even more,
averaging 6.06 gallons for the same trip.  In total, model year 2002
SUVs in the U.S. consume about 250 gallons of gas more each year than
cars, and pickups consume about 292 gallons more than cars.

SUV and Pickup Explosion Slurps Up Much of U.S. Gas Supply

The composition of the U.S. vehicle fleet dramatically changed between
1992 and 2001.   Over that period, SUV registrations nearly tripled,

>from 7,151,602 to 21,636,480 registrations - a 150 percent growth in

proportion to the U.S. passenger vehicle fleet -- and pickup
registrations increased 40 percent, from 27,143,016 to 37,931,583.  SUVs
and pickups are now nearly half of all new vehicles sold.

- Toll from Gas Guzzlers is Enormous:  The average model year 2001 SUV
consumes 242 gallons more per year than the average model year 2001 car.
Similarly, the average 2001 pickup consumes 278 gallons more a year
than a car made in 2001.

- SUV Explosion Is Changing the Composition of the On-Road Fleet:  If
the ratio of SUVs and pickups to cars was the same in 2001 as it was in
1992, there would be 15 million more cars on the road, 13 million fewer
SUVs and 5.5 million fewer pickup trucks.

- 1992 Benchmark Shows 1990s Light Truck Explosion Swallows 113 Million
Barrels of Oil Annually, or 70 percent of Annual Imports from Iraq:
Therefore, if the proportion of SUVs and pickups on the road to cars in
2001 was the same as it was in 1992, 4.7 billion fewer gallons of
gasoline would have been used in the year 2001 alone.   This savings
represents nearly 113 million barrels of oil, or almost 70 percent of
our 2002 imports from Iraq.

The Light Truck Explosion Is Turning Back the Clock on Two Decades
of U.S. Fleet Fuel Economy Gains

Since 1992, the average fuel economy of the U.S. passenger vehicle
fleet declined from 21.7 mpg to a low of 20.4 in 2002.  In fact, 1981
was the last time the U.S. fuel economy level was this low (at 20.5
mpg).   The nation is "stuck in reverse" on fuel economy because of the
light truck explosion:  According to a report published last spring by
the Environmental Protection Agency, the upsurge in light trucks (SUVs,
vans and pickups), which average 6 mpg less than cars, is to blame for
the decline in fuel economy of the overall vehicle fleet.

Please visit www.bettersuv.org for this fact sheet with tables and
footnotes.

**********
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To learn more about this and other Public Citizen Critical Mass Energy and Environment Program campaigns, visit our website at http://www.citizen.org/cmep/

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