STATEMENT FOR THE RECORD - MICHAEL C. BURGESS

ENERGY AND COMMERCE HEARING

RECOVERING FROM KATRINA

September 7, 2005

First, I want to thank Chairman Barton for convening this hearing today. The Chairman has indicated that this will be the first of a series of hearings to examine impact of Hurricane Katrina.

In the wake of Hurricane Katrina, many of my constituents have contacted me with concerns about price gouging by gasoline retailers.

It is tempting to be led by emotion and make quick decisions in order to show that we are "doing something." But I believe that the best thing to do in this situation is to study the issue as deliberately as possible.

In the Dallas-Fort Worth area gasoline prices increased by anywhere between 30-50 cents per gallon in the last week alone. I know Chairman Upton indicated that he received reports that one point that gasoline increased by a dollar per gallon overnight in Michigan.

At the same time, we know that Hurricane Katrina resulted in the suspension of 25 percent of U.S. oil production and took 25 percent of U.S. refining capacity offline. Since domestic oil and gas refineries have operated at nearly 100 percent capacity over the last few years, the loss of even one U.S. refinery would have reduced supply and increased prices at the pump.

We need to determine if the problem is price gouging or a problem with supply.

We need to make sure to fix the right problem. Trying to fix the wrong problem can only make things worse - we all remember the long lines at the gas pump in the 1970s.

If it is determined that illegal price gouging has occurred, I will support prosecution of wrongdoers to the utmost of my ability. I think it is unconscionable that opportunists would take advantage of this national tragedy for financial gain.

But, it is important that we, as policy makers, avoid knee-jerk reactions which can translate into untenable public policy. We should examine the strategy in place for dealing with this type of emergency situation; and if no such strategy exists, we should work to develop one. We need to learn from this experience and determine how we can prevent this loss of supply in the future.

In conclusion, I'd like to again thank the Chairman for holding this hearing. I look forward to hearing from the witnesses who are appearing before us.