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Homeland Security

The Testimony of
Mr. David Cowley
Director of Public Affairs, AAA of Arizona

Senator McCain. Members of the Committee. I am David Cowley, Public Affairs Manager at AAA Arizona. Thank you for the opportunity to testify. AAA Arizona's role in the automotive and transportation arena is familiar to most people - we have 600,000 members in Arizona alone. AAA advocates with the government and the automotive industry on behalf of the motoring public. We also strive to educate motorists about the transportation, automotive and oil industries. Our goal is to provide clarity, common sense and balance to these issues. For many years, Triple A has tracked and reported gasoline supplies and prices. The media and public turn quickly to AAA for explanations whenever gasoline issues arise, as with the August pipeline closure. We've learned that Americans react strongly to bad news about gas prices and availability. What's more, the public is quick to assume that price hikes are the result of greed at the supplier or retail level, and are skeptical about the legitimacy of external pressures forcing gas prices up. Communicating promptly and clearly about unusual supply or pricing issues is critical. We learned of the pipeline situation from a media contact on August 11th, three days after the actual closure - hardly an example of prompt communication from the pipeline industry. There was some initial confusion about the nature of the disruption - again due to an absence of information -- but once that was cleared up, we issued our first press release explaining the closure. We stated that gas supplies were plentiful - it would just take a little longer to get gasoline into the Valley by truck. That was on a Monday. We issued press releases on Tuesday, August 12, and Wednesday, August 13, each time reporting the price of gas and assuring the public that supplies were plentiful - it was a transportation disruption. (Parenthetically, let me say that the difference between a gasoline shortage and a transportation disruption was more than merely semantics -- we felt it important to assure the public that gasoline inventories were normal - this was not another 1973.) On Thursday, August 14th, we issued our weekly Fuel Gauge Report, again calling on motorists to conserve fuel and offering tips on doing so. During this time, my staff and I held many interviews with the television, radio and print media.always with that same message. The panic-buying that led to long lines and station closures began Sunday afternoon, August 18th. As motorists attempted to refuel after their weekend activities, stations began running out of gas, panicked motorists searched for open stations, and eventually, even motorists who didn't need to fill up joined the lines to top off their tanks. Why did it happen? Why, when the disruption had been no more than an inconvenience for almost a week, did it suddenly escalate into panic-buying? In AAA's view, there are two reasons: 1. First, we -- by that I mean those in the oil industry, Triple A, and the government -- should have cautioned the public to curtail their weekend activities in order to accommodate the gasoline supply problem. In my recollection, no one specifically said that. 2. Secondly, we who had been in the media all week explaining the situation, took the weekend off. Although my staff held half-a-dozen interviews on Saturday and Sunday, that was not even close to the number we had been doing. And, we had not issued a press release since our Thursday Fuel Gauge report. Could we have prevented the run on gas stations had we been 'out there' in the media more heavily? I can't say. But, I can say communication - the lack thereof - contributed to the severity of the gas crisis. What have we learned? First, it is time to acknowledge that gasoline is an essential commodity, similar to utilities. The principles of free enterprise and competition should be allowed to establish gasoline pricing, but we also believe the refining industry has an obligation to practice restraint in pricing, especially during emergencies. Secondly, we need to take steps to insure adequate supplies of gasoline to our state, with redundancy built into the system. Third, the industry should have practical - practical -- backup plans in place in the event of infrastructure problems. Fourth, if the industry won't speak to the public about supply or pricing issues -- as seems to be the case -- they should, at least, speak candidly to Triple A and the government. We can then inform the public. (That said, I must point out that Triple A will NOT act as a Public Relations firm for the oil, or any other, industry. We value our reputation as a balanced source of information for motorists. And, if we think it is necessary, we won't hesitate to point out inconsistencies.) Finally, AAA believes all Americans should recognize that fossil fuels are a finite energy resource. We should practice conservation, including the use of carpooling and mass transportation. And, we should buy the most energy efficient vehicles that are practical for our needs. Senator; Members of the Committee; hearings such as this are an important means of assessing the pipeline closure and subsequent events...and preventing a recurrence. AAA hopes there will be a communication component in your recommendations encouraging managers of essential infrastructure to speak candidly about disruptions. That concludes my statement. I'll be happy to answer your questions.

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