Losses in refinery capacity are not completely unforeseeable. The Oversight and Investigations Subcommittee that I chair discovered internal documents from 1995 and 1996 that demonstrate that Mobil, Chevron and Texaco advocated limiting domestic refining capacity to drive up prices. The oil companies' strategy worked. As refineries closed and Americans experienced record high gasoline prices, Big Oil realized record profits. The average profit margin to refine a barrel of crude oil into gasoline has recently jumped from $9 to $35.85 a barrel. The average refinery profit on a gallon of gas, at $3 a gallon, has increased from 20 to 85 cents a gallon.

My legislation, the Federal Price Gouging Prevention Act, would provide the FTC with the authority to investigate and punish those who artificially inflate the price of gas. The FTC could exercise this authority over big oil companies at each stage of the fuel production and distribution supply chain.

Finally, the professor resorts to scare tactics, likening my legislation to price controls that would cause lines at gas stations.

Walberg said that under the plan, “consumers can expect longer lines at the pump, higher prices and less gasoline available during emergencies.”

Professor Wolfram (and Congressman Walberg) must not have read my bill, as my legislation never mentions price controls. Under my bill, when examining instances of price gouging, the Federal Trade Commission would be required to consider mitigating factors such as "additional costs, not within the control of that person, that were paid, incurred or reasonably anticipated by that person." In other words, price increases that compensate for reductions in supply or increased costs would be perfectly legal under the bill. The legislation simply requires that those price increases be justified. (Bold) added by me.