With the price of home heating prices tripling over the past year, many low income consumers and small businesses in our districts and our states are hard pressed to heat their homes and to keep their shops and their factories running. Hundreds of letters and calls have poured into our districts and Washington offices describing the crisis from their own perspective where to a large extent they are fighting a losing battle in staying warm without going broke in the process. Today, we are trying to find some answers from those witnesses who are demanding to know how this happened and what our local, state and federal policy makers are doing to ensure that it is corrected as fast as possible and does not reoccur. We are asking for first hand reports from our witnesses today on the extent of the problem and a review of what states are doing to try to meet this emergency and how the federal government can and must do much more to both help low income families put at risk by the frigid temperatures across the Northeast and to keep ice-breaking tug boats in operation so our ports and rivers remain open to barge traffic. There are no simple answers on why or how we got into this crisis but there can be little doubt that dramatically higher energy prices will boost inflation and might ultimately force the Federal Reserve to consider additional interest rate hikes.
Oil prices are higher today than at any time since the Iraq invasion of Kuwait a decade ago.
Production cutbacks decreed by the producer cartel, the Organization of Petroleum Exporting Countries, OPEC, have caused worldwide stocks, including those in the U.S., to be drawn down to very low levels. This imbalance has resulted in the climb in the sharp climb in crude oil prices over the past year. Late last year OPEC was indicating that it might relax its production quotas if stocks reached 1996 levels, but in early January of this year its member states reversed course and indicated that they fully intended to maintain their cutbacks of about 6 percent of world production at least through March of this year, and possibly through June or later. Yesterday, I talked with a civil service employee in Sullivan County who told me that his cost for heating oil has doubled from December of last year to January of this year and that he can only afford to replenish his supply of heating oil to the 150 gallon mark of his 300 gallon tank. In yesterday s edition of the Times Herald Record a prominent paper in my district, described the plight of many elderly low-income consumers who are being forced to turn up their thermostats in the face of sharply higher home heating costs.