Gasoline Prices: New Legislation and Proposals

Publication Date: June 2006

Publisher: Library of Congress. Congressional Research Service


Research Area: Energy



The high price of gasoline was an important consideration during the debate on major energy legislation, which ended August 8 as the President signed the Energy Policy Act of 2005, H.R. 6 (P.L. 109-58). However, prices continued to surge, spiking at the end of August when Hurricane Katrina shut down refining operations in the Gulf of Mexico. The continuing crisis renewed attention to some issues that were dropped or compromised in the debate over P.L. 109-58, as well as a number of initiatives to reduce the impact of high prices on consumers.

A large number of factors combined to put pressure on gasoline prices, including increased world demand for crude oil and U.S. refinery capacity inadequate to supply gasoline to a recovering national economy. The war and continued violence in Iraq added uncertainty and a threat of supply disruption that added pressure particularly to the commodity futures markets.

Among the issues that received new attention were vehicle fuel economy standards, leasing on the Outer Continental Shelf, and refinery “revitalization” provisions. The Gasoline for America’s Security Act of 2005, H.R. 3893, was passed by the House on October 7 by a vote of 212-210. A similar bill, S. 1772, was defeated in the Environment and Public Works Committee on October 26 by a tie vote of 9-9.

The budget reconciliation process was the vehicle for two major energy initiatives: the opening of part of the Arctic National Wildlife Refuge (ANWR) to oil and gas development and the lifting of the moratorium on oil and gas leasing on much of the Outer Continental Shelf (OCS). Both the Senate Energy and Natural Resources Committee and the House Resources Committee included leasing ANWR in their reconciliation bill sections. The House Resources Committee included provisions regarding OCS leasing, but the Senate Energy Committee did not. ANWR leasing was included in the Senate bill that passed on November 3 (S. 1932), but the House leadership dropped both ANWR and OCS provisions before its reconciliation bill, H.R. 4241, was passed on November 18 by a vote of 217-215. The conference report on the bill, approved by the House but amended in the Senate, does not contain either measure.

The gasoline price surge influenced the debate over P.L. 109-58, but the urgency of previous energy crises was lacking. In part, this may be due to the fact that there has been no physical shortage of gasoline or lines at the pump. In addition, the expectation of former crises — that prices were destined to grow ever higher — has not been prevalent.

However, the persistence of high gasoline and oil prices into a second summer has raised alarms over the economic consequences of the situation, heightened following the disastrous effects of Hurricane Katrina.

As gasoline prices surged to the $3.00 per gallon level again in spring 2006, a new wave of legislative proposals was put forth in Congress, including strengthening measures regarding price gouging and profiteering, temporarily refunding federal gasoline taxes, and windfall profits tax measures.