Editorial: A lasso for big oil

Sunday, Oct. 16, 2005 | 10:39 a.m.

Senate Minority Leader Harry Reid took advantage of a break in Congress last week to speak locally about his plan for reducing gasoline prices. His talk was similar to a speech he gave on the Senate floor in May 2004. "Big oil companies and refiners are getting rich ... and middle-class families are getting gouged," he said then.

At the time, regular unleaded gasoline was selling in Las Vegas for $2.29 a gallon and the cost for enriched blends was nearing $2.50. With prices having increased 60 cents and more since then, Reid was even more animated during his Wednesday news conference. "How do (consumers) feel when (they) understand that oil companies are making $100 billion in profits?" Reid said. "By any standard, that's obscene."

Reid called upon President Bush to contact the heads of oil and gas companies and tell them to "quit profiteering at a time of national need." Without a doubt the president should make those calls. Realistically, however, given the Bush administration's sworn allegiance to big oil and most other American corporations that are big and rich, we don't expect that energy executives are waiting by their phones for that particular call from the White House.

Other aspects of Reid's plan, however, hold more promise. He said he intends to introduce legislation that would open the books of petroleum companies to congressional inspection and that would make companies engaging in price gouging liable for their actions, possibly with criminal penalties attached. With oil just as vital to Americans as the power sold by utilities, which must justify their proposed rate increases before state regulatory commissions, we see as fair and equitable a law requiring the few large oil companies that dominate the industry to justify their big increases before Congress.

Furthermore, Reid said he supports a new tax, one that would enable consumers to share in oil company profits that result from "windfall," or sudden, price surges.

We believe Reid is right to call for more federal oversight of oil companies, which for decades have been viewed by a good segment of the American public as being soulless opportunists. This may, or may not, be a false impression, but it would be nice to know for sure. With oil companies' books open to inspection by federal accountants, perhaps there could be, at long last, a definitive answer to the No. 1 question consumers always ask when gasoline prices suddenly rise. That question, simply, is "Why?" The public never gets a straight answer.