Committee Meeting of ASSEMBLY TRANSPORTATION COMMITTEE "Testimony concerning the recent increase in the price of gasoline in New Jersey from invited representatives of the petroleum products industry and academic experts" LOCATION: Committee Room 11 DATE: September 15, 2005 State House Annex 11:00 a.m. Trenton, New Jersey MEMBERS OF COMMITTEE PRESENT: Assemblyman John S. Wisniewski, Chair Assemblyman John J. Burzichelli Assemblyman Upendra J. Chivukula Assemblyman Gordon M. Johnson Assemblyman David R. Mayer Assemblyman Michael J. Panter Assemblyman Vincent Prieto Assemblyman Brian P. Stack Assemblywoman Linda Stender Assemblyman Peter J. Biondi Assemblyman Francis L. Bodine Assemblyman John C. Gibson Assemblyman Kevin J. O'Toole ALSO PRESENT: Maureen McMahon Christopher Jones Jerry Traino Nancy M. Lipper Assembly Majority Assembly Republican Office of Legislative Services Committee Aide Committee Aide Committee Aides Meeting Recorded and Transcribed by The Office of Legislative Services, Public Information Office, Hearing Unit, State House Annex, PO 068, Trenton, New Jersey TABLE OF CONTENTS Page Clinton James Andrews, Ph.D. Associate Professor and Director Edward J. Bloustein School of Planning and Public Policy Rutgers University 9 Tyson Slocum Research Director Public Citizen Washington, D.C. 33 Kimberly Ricketts Director Division of Consumer Affairs New Jersey Department of Law and Public Safety 59 Jim Dieterle State Director AARP, and Vice President Board of Director New Jersey Shares 74 Jim Benton Executive Director New Jersey Petroleum Council 79 John Felmy, Ph.D. Chief Economist American Petroleum Institute 79 William Dressler Executive Director New Jersey Gasoline Retailers Association 80 Mark Salisbury Representing Mohawk Oil Company 80 TABLE OF CONTENTS (continued) Page Eric DeGesero Executive Vice President Fuel Merchants Association of New Jersey 81 Paul Riggins Representing Riggins Oil Company 81 Pat Fiumara Associate Director New Jersey Gasoline Retailers Association 81 Carol J. Kientz Executive Director Home Care Association of New Jersey, Inc. 152 John Milhaczho Vice President Special Projects Driving School Association of New Jersey, and Co-owner Safety First Driving School 152 Abigail Caplovitz Legislative Advocate New Jersey Public Interest Research Group 159 APPENDIX: Slides submitted by Clinton James Andrews, Ph.D. 1x Testimony submitted by Tyson Slocum 8x Testimony submitted by Kimberly Ricketts 15x TABLE OF CONTENTS (continued) APPENDIX (continued): Page Hurricane Katrina’s Effect on Gasoline Supply and Prices submitted by John Felmy, Ph.D. 19x Testimony plus Attachments submitted by Eric DeGesero 40x Testimony submitted by Carol J. Kientz 61x Testimony submitted by John Milhaczho 63x Testimony submitted by Lowell Arye Executive Director Alliance for the Betterment of Citizens with Disabilities 67x Testimony submitted by New Jersey School Boards Association 69x Testimony submitted by Jean Alan Bestafka Executive Director Home Health Services and Staffing Association of New Jersey 70x Memorandum addressed to Assembly Transportation Committee from Celeste Carpiano Executive Director New Jersey Association of Counties 71x TABLE OF CONTENTS (continued) APPENDIX (continued): Page Testimony submitted by H. Mickey McCabe President Medical Transportation Association of New Jersey 72x lb: 1-94 rs: 95-165 ASSEMBLYMAN JOHN S. WISNIEWSKI (Chair): Good morning, everyone. Welcome to the Summer session of the Assembly Transportation Committee. I’m Assemblyman John Wisniewski. I appreciate all of my colleagues taking the time for what is not traditionally a time that this Committee will meet to be here, to consider a very important issue, which is gasoline prices. Let me just make a couple of housekeeping announcements first. If you have a cell phone, or a pager, or any electronic device that makes loud noises, please try and set it on silent, or turn it off, so that those who are providing testimony, or asking questions, are not disturbed. This meeting is going to be broadcast on the Internet. The microphones in front of you, as you testify, will be recording this and it will be broadcast on the Internet and also archived on the Internet for future reference, in case you’re not able to sleep one night. (laughter) I would ask those who are here, if you wish to testify there are forms on a table in the back of the room that we would ask you to fill out and get up here to Maureen or Nancy, so that we are aware of your desire to testify. If you have written testimony, we would appreciate having a copy of that written testimony in advance. And as always, if you have written testimony, to the degree possible, we would appreciate it if you not read it verbatim. We’re able to do that. We would appreciate it if you could give us the essence of the points you wish to make. And finally, everyone who is here to testify -- once you have concluded testifying and have answered questions from the Committee, I would appreciate it if you would remain. There may be subsequent individuals testifying who raise issues or points perhaps not covered by your 1 testimony, or that require follow-up questioning, and if your schedule permits, myself and members of the Committee would permit your staying. With that, I would ask Maureen to call the roll. MS. McMAHON: Assemblyman O’Toole? ASSEMBLYMAN O'TOOLE: Here. MS. McMAHON: Assemblyman Gibson? ASSEMBLYMAN GIBSON: Here. MS. McMAHON: Assemblyman Biondi? ASSEMBLYMAN BIONDI: Here. MS. McMAHON: Assemblyman Bodine? ASSEMBLYMAN BODINE: Here. MS. McMAHON: Assemblywoman Stender? ASSEMBLYWOMAN STENDER: Here. MS. McMAHON: Assemblyman Stack? ASSEMBLYMAN STACK: Here. MS. McMAHON: Assemblyman Prieto? ASSEMBLYMAN PRIETO: Here. MS. McMAHON: Assemblyman Panter? ASSEMBLYMAN PANTER: Here. MS. McMAHON: Assemblyman Mayer? ASSEMBLYMAN MAYER: Here. MS. McMAHON: Assemblyman Johnson? ASSEMBLYMAN JOHNSON: Here. MS. McMAHON: Assemblyman Chivukula? ASSEMBLYMAN CHIVUKULA: Here. MS. McMAHON: Assemblyman Burzichelli? 2 ASSEMBLYMAN BURZICHELLI: Here. MS. McMAHON: Chairman Wisniewski? ASSEMBLYMAN WISNIEWSKI: Here. Thank you. By arrangement with my colleagues across the aisle, we’re going to have two opening statements that are going to be, I promise you, very brief. And I’ll take the prerogative of the Chair and call Assemblyman O’Toole to make an opening statement on behalf of the Minority. ASSEMBLYMAN O'TOOLE: Thank you, Chairman. First of all, I want to thank you for convening this hearing -- extraordinary hearing. I think this is a step in the right direction, Chair. But I think, to move this issue along, and I think with the gravity of the issue at hand and with gas prices being as expensive as they are, I think going forward, perhaps, having a Committee hearing to talk about and vote on some bills that we’re going to talk about would be the next step. I really appreciate that you have struck -- I think two or three public hearings we’re going to have. But I think part of that-- And certainly before Election Day, maybe in the next couple of weeks, we should have a Committee hearing. And I would ask that we send a letter at the conclusion of this hearing to the Acting Governor, our Speaker, to see if he can reassign some of the important bills I suspect we’re going to hear some testimony on. Having said that, I think it’s not news to anybody that gas has never been more expensive. It’s never been more of a crisis here in New Jersey. I can’t tell you how many constituents have come to me and said they are now paying $50 and $60 just to fill up on gasoline for their vehicle. This is as critical, and the question is, how did we get here and why are we 3 here now? I think some of the things I’d like to hear some of the speakers talk about, either this hearing or the next hearing, is the potential of repealing of the law that prohibits selling of gas below market, which I’m told is -- the Attorney General is not allowed to do that right now, because of a 1930 law. And at some point, I’d like to hear some testimony from some expert talking about how we can incentivize using alternate fuels, and whether it’s increasing a State tax credit for hybrid vehicles, whether it’s increasing the incentive, or creating incentive for some of our refineries to increase their capacity, which we have not seen -- certainly not a new refinery, new capacities have been added in the last two decades. I really think we have to look at that. We have a program at BPU, the solar panel program, which, frankly, has not been used to its potential. We have gasoline gouging that’s going on. Frankly, we have some laws that are on the books that are essentially useless, and we’ve seen testimony -- will see testimony, certainly in writing, from the Commissioner of Community Affairs. It says that she has no ability to go after some of the gouging that’s going on. To me, that’s unconscionable. If there are people who are jacking up the prices overnight on gas they have in the ground, based on what they think the gas should be the next day, I think that’s unconscionable. And if the fine that we have seen is $50 an offense -- again, that’s not much deterrent for those people who are abusing the public trust. I think that we should talk about increasing the transit credit trust for those who use public transportation. And I’m hoping, Mr. Chair, we can get some testimony about some of the commodities traders, and some of the Wall Street folks, that have really lived for this day -- that I’m 4 told, and I hope it’s not true -- have really (indiscernible) away gas futures. So it’s really in their interest not to have gas go lower, but rather go higher, and they can make their million, or the next million, or their next 10 million.