New Schumer Analysis Reveals Upstate Farmers Devastated By Outrageous Gas Costs Senator Unveils Steps To Lower Prices

New York farmers are paying 35 percent more to operate their farms, Senator Charles E. Schumer revealed today. Schumer unveiled a new study showing that the average New York farmer is paying more than $2,500 over 2002 costs and called on the Administration to release stored government oil reserves that would quickly lower gas prices. Schumer also urged the FTC to block the ChevronTexacoUnocal merger and to review the ExxonMobil merger and the ChevronTexaco mergers to asses their impact on gasoline prices.

New Yorks farmers are being stretched too thin as it is, Schumer said. The skyrocketing price of oil should be the last thing they need to worry about. The bottom line is, the price of gas is going way up and competition is going way down, Schumer said. Without regulating the mergers of these behemoth oil companies, gas prices will continue to go full speed ahead and nothing can rein them in.

Schumer said today that farmers are hit particularly hard by rising gas prices because most farm planting and harvesting equipment uses diesel fuel or gasoline. When farmers apply fertilizer this year, they will be hit twice by higher fuel costs. Not only do high energy prices result in increased fertilizer prices (natural gas can account for up to 90% of the cost to produce nitrogen fertilizers), but increased costs to run the equipment needed to apply that fertilizer. In addition, this winter, farmers paid high heating bills to keep their barns and greenhouses warm. Farmers will also suffer from high costs when they bring their goods to market, as trucking prices, highly dependent on fuel costs, continue to rise.

On Tuesday, the price of crude oil on the New York Mercantile Exchange closed at $52.29, and crude oil has been trading at above $50 per barrel for half of 2005. In addition, the average price at the pump in New York State has hit $2.33 already 46 cents higher than it was last year on this date. National average retail gasoline prices have increased to 2.25 and analysts predict that prices could increase as the summer driving season rapidly approaches.

Schumer today released a new analysis showing how much more New York farmers in each county are paying to for gas over a 27month period. Specifically, Schumer found that:

" Over the past two years, farmers in the Capital Region have paid an additional $8.26 million more for fuel over 2002 prices.
" Over the past two years, farmers in Central New York have paid an additional $8.28 million more for fuel over 2002 prices?
" Over the past two years, farmers in the Hudson Valley have paid an additional $10.13 million more for fuel over 2002 prices.
" Over the past two years, farmers in the Rochester/Finger Lakes area have paid an additional $10.13 million more for fuel over 2002 prices.
" Over the past two years, farmers in the North Country have paid an additional $11.82 million more for fuel over 2002 prices.
" Over the past two years, farmers in the Southern Tier have paid an additional $12.26 million more for fuel over 2002 prices.
" Over the past two years, farmers in Western New York have paid an additional $16.51 million more for fuel over 2002 prices.

In an effort to create competition to drive these already too high gas prices down, Schumer today called on the FTC to block the newly announced merger between ChevronTexaco and Unocal. The ChevronTexacoUnocal merger, like the ChevronTexaco and ExxonMobil mergers before it, will further reduce competition in the oil industry by placing the vast majority of production and distribution resources under the control of a handful of corporate giants. Schumer also called on the FTC to look at other oil company mergers including ExxonMobil, BPAmoco and ChevronTexaco to examine how to bring gas prices down.

Schumer today called on the Department of Energy to examine ways to apply fuel efficient technologies to agricultural equipment. In addition to bringing gas prices down, this could have both a positive economic and environmental benefit. Schumer said this would be a major step toward being smarter about how we use energy resources. At a time when hybrid cars are being introduced into the market, we should explore adapting this technology to other sectors.

Schumer also urged the Administration to counteract the cartel's supply cuts and calm the markets by initiating a swap from the SPR. Initiating a swap of oil from the SPR to increase the supply of oil is a proven way to reduce the price of gasoline and heating oil. In the fall of 2000, Schumer successfully convinced the Clinton Administration to swap 30 million barrels over 30 days, causing crude oil prices to quickly fall by over $6 per barrel and wholesale gasoline prices to fall $0.14 per gallon. Under a swap, the federal government could decide on a set quantity of oil to release from the SPR, and accepts bids from private companies for the rights to that oil. The companies would then bid on how much oil they are willing to return to the SPR at a later date. For example, if the federal government decided to release oil and a private company wanted to obtain 10 million barrels, the company could bid for the 10 million barrels by promising 15 million barrels to be returned to the SPR at a later date.

New Yorks farmers are getting burned by gas prices and there is no relief in sight. As we head into the summer gas prices will continue to heat up if the Feds dont do something now, Schumer said.

Click here to view study.