GAO investigates oil companies

By | April 01, 2006
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The Government Accountability Office (GAO), the watchdog arm of the U.S. Congress, plans to investigate whether oil companies have policies that knowingly restrict consumer access to ethanol and biodiesel. The investigation, set to begin in April, was requested by U.S. Sens. Barack Obama, D-Ill., and Charles Grassley, R-Iowa, according to Grassley.

The senators requested the investigation after Obama's office obtained an internal memorandum from a major petroleum company. The memo said gas station franchise owners are prohibited from selling non-brand-named E85 or B20 from fuel islands or canopies with the oil companies' name or logo, and other locations for alternative fuels must be approved, according to Tommy Vietor, Obama's deputy press secretary. While oil companies shouldn't be blamed for trying to sell oil, the companies' actions shouldn't result in restricted consumer access to ethanol and biodiesel. "If they are using their power to influence gas station owners who want to offer alternatives, that should be out of bounds," Vietor said.

The investigation will look into whether any oil companies have policies or practices that prohibit or discourage construction, installation or operation of E85 or B20 fueling pumps, Grassley said. The rumor is that oil companies are asking retailers to sign contracts that they will not install any E85 fuel pumps. "We want to get a handle on that," Grassley told EPM. "We want to put a stop to it."

If the investigation finds that the practices of big oil companies are restricting consumer access to biofuels, there are a few steps that might be taken. First, the U.S. Attorney General's Office could be asked to determine if the practices possibly violate anti-trust laws or, secondly, legislation could be introduced to make the contracts in question null and void.

After the request was approved, Sen. Norm Coleman, R-Minn., was added as a "co-requestor" of the investigation.