April 30, 2006 -- In an exclusive debate on "This Week with George Stephanopoulos," Sen. Chuck Schumer, D-N.Y., faced off with former Senator J. Bennett Johnston, D-La., now a spokesperson for the oil industry, on the issue burning a hole in American pocketbooks -- rising gas prices.
"It is the iron law of supply and demand," said Johnston. He cited Hurricane Katrina, the war in Iraq, and boiling tensions with Iran, not the oil industry, as the source of rising rates.
Schumer called the Organization of the Petroleum Exporting Countries (OPEC), which controls a significant portion of the world's oil supply, a "cartel," and charged that mergers between multi-billion dollar oil companies such as Exxon and Mobil have eliminated competition.
"We have five vertically integrated companies," Schumer said. "They don't compete."
"The main driver of higher gas prices is crude oil," said Johnston. "We're ratting the saber on Iran and, you know, it jacks up the price."
He said that if the United States takes military action against Iran, "we'd see gasoline above $5 or $6 … [and] crude above $100 a barrel."
Schumer, head of the Democratic Senatorial Campaign Committee, continued to push conservation, revised mileage standards and a "Manhattan Project" dedicated to the discovery of new energy sources.
"What's good for Exxon Mobil is not necessarily good for America," he said.
Schumer also supported a windfall profits tax on the oil companies making record profits as drivers pay more at the pumps.
"We tried the windfall profits tax," Johnston said about his years in the Senate. "I voted for it. It was a terrible mistake."
He said the measure only reduced domestic oil production, doing little to reduce gas prices.
Schumer said the heart of the problem lies in the structure of the oil companies.
"We should do a little good, old fashioned trust busting," said Schumer.
Johnston outlined the large expenses, from underwater drilling to other forms of exploration, that necessitate big companies with big budgets.
Both agreed that there may be room for compromise between the two parties if the Democrats permit more exploratory drilling and Republicans currently opposed to increased mileage standards relent. Neither was optimistic that such a compromise was at-hand.
Johnston remained confident that gas prices will return to normal.
"Believe me, it will go down," he said. "It always does."
George Stephanopoulos's entire interview with Schumer and Johnston can be viewed at www.thisweek.abcnews.com