The White House's choice to head the US Federal Trade Commission remained stalled earlier this month over concerns by some Senate Democrats that the administration is not doing what it can to prevent high retail fuel prices.
US Sen. Ron Wyden (D-Ore.) May 19 placed a "hold" on the nomination of Deborah Majoras, a former US Department of Justice antitrust official, to chair FTC. Wyden has sharply criticized the agency over the past decade for not taking steps to control what he views as monopolistic practices by fuel marketers.
"In this administration [of President George W. Bush] and in the [Bill] Clinton administration, Federal Trade Commission political appointees have sat on their hands while the anticompetitive practices of the oil industry gouge American consumers at the gas pump.
"I have given Ms. Majoras a number of opportunities to explain to me what she plans to do differently as a commissioner, and she has made it abundantly clear that she has no specific plan to energize the FTC to begin fighting for consumers," said Wyden.
The senator also noted that Majoras, currently a partner with the Jones Day law firm, might have to excuse herself from some energy-related cases because of legal work performed for ChevronTexaco Corp.
Majoras told a Senate panel earlier this month that the agency should revisit how competitive the US refining sector is, particularly given a refinery is slated to close, specifically the 70,000 b/d Shell Oil Co. complex in Bakersfield, Calif. The attorney also called for a special "energy council" to study gasoline issues.
But Wyden and his California colleague, Barbara Boxer (D), were not satisfied with Majoras's statement. They pledged to continue blocking her nomination until they feel the agency takes the pricing issue more seriously. FTC's general counsel recently blamed higher gasoline prices on escalating crude costs, strong demand, and tight inventories.
But a new General Accounting Office study found that extensive consolidation in the oil industry over the past decade generally led to higher wholesale gasoline prices from the mid-1990s through 2000. Six of the 8 mergers GAO modeled led to price increases, averaging about 1-2¢/gal. The FTC has disagreed with GAO's analysis, calling it flawed and unreliable.
If confirmed by the Senate, Majoras would replace retiring Chairman Timothy Muris, who plans to return to George Mason University's School of Law. In a May 12 statement, Muris endorsed Majoras to replace his slot on the commission, which expires in 2008.
