The motion prevailed.
Senator Irwin’s statement is as follows:
Inflation is high and people are struggling with high prices, and this Legislature should be doing something about that. Moments ago, I spoke about our failure to provide universal relief to all citizens, provide a $500 rebate check, that was rejected here. The concern about inflation and rising costs is universal.
The reason why I rise to oppose this measure is because it won’t work. There is a reason why gas prices are going up, and that reason is supply and demand. Moments ago, we were talking about school curriculum. This is basic economics—supply and demand. The supply is constrained not because of federal action, not because of federal regulations, not because somehow the new administration has reduced access to oil drilling on federal land here in the United States. No, in fact there are a record number of leases for oil companies to drill on federal land.
The reason why our gas prices are going up is because oil companies and OPEC are trying to restrain supply, and they’ve been at it for a long time. This is why former President Trump reached out to the Saudi government and OPEC back in April 2020 to ask them to lower production and end their price war with Russia. You see, at the time OPEC was trying to reduce production because oil prices were falling and Russia was refusing to participate in their effort to lower production and therefore boost prices. What did OPEC do? What did the Saudi government do? They started pumping more and more oil to try to lower the price, to try to punish Russia. This had the natural effect of also making it less profitable for oil companies here in the United States to drill on our land and that’s why former President Trump reached out to the Saudis and reached out to OPEC and said, Please, lower production. But when OPEC agreed to do that, they did it not to support our consumers; no, they did it to support their profits. They did it to add profits to the oil companies and OPEC nations. When this caused global supply to drop by 10 percent, oil companies rejoiced, OPEC nations rejoiced, and consumers are now feeling the pinch.
It wasn’t just that demand plummeted during the pandemic and we’re feeling the whipsaw of the end of a global deflationary pandemic. It’s not just that. It’s also this price war, and this is a price war against our consumers. You don’t have to take my word for it. You can listen to the oil company executives themselves. On an earnings call this February, CEO Darren Woods of Exxon said, “One of the primary objectives we’ve had…is less about volume and volume targets and more about quality and profitability of the barrels we’re producing.” While this Legislature is bailing out the oil companies, the industry is gouging and abusing our citizens .
That’s why I stand to oppose this measure that falls in line with these companies to give them additional opportunities to gouge our citizens and to pocket the difference between what they’re charging now and what they’ll have to pay when they no longer pay sales tax, and that’s why I’m so frustrated that it seems there is a fundamental misunderstanding of the facts of why our citizens are being punished and what led to it.
The following bill was read a third time:
Senate Bill No. 973, entitled
A bill to amend 1937 PA 94, entitled “Use tax act,” (MCL 205.91 to 205.111) by adding section 4ii.
The question being on the passage of the bill,
The bill was passed, a majority of the members serving voting therefor, as follows: