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 Category :: Leisure & Recreation |
Author :: David C Skul  |
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| Article Title :: Midwest Gas Price Investigation - Investigation Likely To
Continue For At Least Three to Four More M |
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The Federal Trade Commission (FTC) issued an interim report to
Congress on its investigation into Midwest gas price increases
that was cited at the reasons that the FTC launched the
investigation. It also provides a status report on the
continuing investigation, including progress and a description
of the work not yet done. The report details the history of the
price spikes of reformulated gasoline (RFG) in the Midwestern
part of the country and how these increases caused Commission
staff to initiate a preliminary investigation in June and
prompted the Commission to begin a formal investigation during
the latter part of July.
The report analyzes many conditions reported as potential causes
of the gas price spikes -
ranging from higher than normal crude oil prices, to the
expectation of compliance with EPA Phase II regulations for
summer-blend reformulated gasoline in high-ozone urban areas, to
the damage to the critically important Explorer pipeline during
March. However, the report says that "although it is likely that
each of these supply factors contributed to the dramatic recent
price spikes in the Midwest, no single factor appears from
staff's preliminary investigation to be likely to provide a full
explanation, and staff does not yet have sufficient information
to assess the impact of these factors in combination."
In accordance with the report, Commission staff is investigating
"the possibility of collusion or tacit coordination, conduct
that could be illegal under Section 5 of the Federal Trade
Commission Act." Due to the abundance of potential interwoven
causes as well as the monstrous amount of evidential information
being collected for the course of the investigation, the report
also states that "this investigation is likely to consume, at a
minimum, another three or four months."
The report shows that on June 29, Commission staff issued the
first round of subpoenas to the nine refiners that currently
supply the Midwestern markets and that within the month, staff
has accepted and logged approximately 200 boxes of
documentation. Around mid August, most documents requested from
the first round of subpoenas will be delivered to the Commission
offices. The Commission also issued a second round of subpoenas
to other refiners last week, and has issued Civil Investigative
Demands (CIDs) to the refiners recently, requesting that the
refiners compile data and answers to all of the Commissions
written questions. Commission staff issued another set of
subpoenas on July 25 to the entities that own or control the gas
transportation pipelines serving the Midwest markets of the
United States. Documents from that set of subpoenas are expected
to begin arriving shortly at Commission offices. The report
further details the Commission's plan to conduct a series of in
depth interviews as part of the investigation. Staff has already
conducted nearly 15 interviews with market participants,
consumers, corporate consumers and many others with knowledge of
investigation relevant information, and continues the process of
capturing pertinent industry-wide data from the Oil Price
Information Service (OPIS). After the documentary evidence has
been reviewed and analyzed, staff will take depositions under
oath of key participating personnel throughout the gasoline
distribution chain in the Midwest United States.
Federal Trade Commission staff will also coordinate all of the
investigative efforts with the Attorney General of Michigan,
Ohio, Wisconsin, Illinois, Iowa, Minnesota, Kentucky, South
Dakota, Indiana, Missouri, and West Virginia.
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