Thanks to oil-company lobbyists, legislation protecting independent gas-stationdealers in Missouri has tanked.

Grease Monkeys 

Thanks to oil-company lobbyists, legislation protecting independent gas-stationdealers in Missouri has tanked.

High gas prices in Missouri periodically have pricked interest in Jefferson City. Gas-station dealer attrition in Kansas City -- where, perhaps not coincidentally, prices are often highest -- also has drawn attention from legislators. Although efforts to pass dealer-protection laws have been floated for almost two decades, only one weak law has cleared the hurdles.

The biggest push came in 1988, remembers Lee Lauer, who directed the now-defunct Missouri-Kansas dealer trade organization. Oil companies had been running off their dealers and replacing them with company-operated stations that often priced below dealer cost, which further decimated the ranks. Lauer's group brought a divorcement initiative to the legislature and pitched it as a bill to protect both small businesses and consumers. "When you eliminate competition, higher prices are the result," Lauer says. "Of course, that's what's happened ever since."

The dealers found receptive ears in the House, which passed the bill by a 2-1 margin. "We had a strong grassroots effort," says Lauer. "We had enough dealers in the capitol to call on each of the 151 legislators."

The vote looked tighter in the Senate; Lauer informally tallied 15 in favor of passage, two fewer than needed. But the oil companies turned up the pressure, flying lobbyists to Missouri from around the country; Lauer identified 27 of them. Wholesale distributors, concerned about vague language in the bill that might have affected them, also worked against it. Two weeks before the floor ballot, the number of votes had dwindled to five. "We didn't have the horses," he says. "We pulled the bill."

Lauer's group came back the following year, but that bill stalled in a House committee. "It broke the spirit of the dealers," he says.

That defeat marked the end for divorcement in Missouri, but not for dealer protection laws. Beginning in 1990, the legislature considered a statute that would prohibit refiners, distributors, and dealers from pricing gas below their cost. The law finally passed in 1993 with support from newly elected Governor Mel Carnahan, whose campaign platform included oil industry reform. Although the law was a watered-down version of other ones that banned below-cost selling, state officials insisted it had the teeth to bite offenders.

But in the frenzied final days of the 1995 session, legislators pulled several of those teeth. Senator Mike Lybyer of Huggins slipped a two-sentence provision into a 193-page economic development bill, and by the time anyone figured it out, it was too late to delete it. Formerly, a company violated the below-cost selling law if a competitor was injured by predatory pricing. Lybyer's provision mandated that the state had to prove intent to injure, a difficult burden. The House passed a repeal bill the following year, but it died in the Senate. Despite hundreds of dealer complaints of below-cost selling, the state has prosecuted only a few cases since the statute's passage.

By 1998 most of the dealers in Kansas City and throughout the state were gone, and Lauer folded his organization. "I did it for 25 years," he says. "It was one of those things that had a bad ending."

With no dealers to complain, the oil companies have found the sailing relatively smooth. In June, Carnahan appointed a task force to examine the spring gas-price spike. Chaired by Attorney General Jay Nixon, the task force met five times; in August the committee issued a report concluding that oil companies and refineries took in excessive profits but did nothing illegal. Nixon is still looking at the possibility of collusion at the retail level.

The House also formed a committee to study soaring prices. At its first meeting in June, chairman Bill Ransdall of Waynesville vowed to get to the bottom of the matter. "We don't have those answers now," Ransdall said. "We will have those answers before this committee turns in its final report."

In September the committee held its third and final hearing, and Ransdall admitted he still had no clue as to why prices were so high and varied so dramatically from city to city. Regardless, he said, "I don't think there's anything we can fix legislatively."

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