Jul 21: On July 16, Senate Majority Leader Harry Reid (D-NV) introduced the Stop Excessive Energy Speculation Act (S. 3268) with 12 cosponsors. Reid said, “Right now, Wall Street traders are raising gas prices with nothing more than the click of a mouse. Without regard for anything but their own profits, traders are bidding up prices by buying huge quantities of oil just to sell them at an even higher price.
"For nearly eight years, the Bush-Cheney Administration has turned a blind eye to this increasingly excessive speculation, which has driven oil future prices to record levels and directly contributed to soaring prices of gasoline at the pump. In fact, the former head of the CFTC’s [Commodity Futures Trading Commission's] trade division said speculation has increased the price of oil by as much as 50 percent. That is why Democrats have introduced legislation to curb excessive speculation and increase transparency and accountability in the oil and gas markets. This bill will address the rising cost of gasoline in the short-term, prevent Wall Street traders from gaming the oil markets and ensure that American consumers are paying a fair price at the pump.”
On July 17, Senator Pete Domenici's (R-NM) office issued a rebuttal release saying that energy market experts disagree with Democrats about the market speculation issue. The Republican release quotes experts and agencies including: Warren Buffet, Chairman & CEO, Berkshire Hathaway; International Energy Agency; Ben Bernanke, Chairman of the Federal Reserve; Daniel Yergin, Chairman, Cambridge Energy Research Associates; John Chapman, Researcher at the American Enterprise Institute; Michael Haigh, senior commodity analyst at Societe Generale Corporate and Investment Banking; and Craig Pirrong, professor of finance at the University of Houston. The "experts" all indicate that generally high energy prices are not the result of speculation, but rather a factor of supply and demand.
Senator Domenici, ranking member of the Senate Energy and Natural Resources Committee, said he plans to offer an offshore production amendment to S.3268. Domenici said, “Although I’m perfectly willing to work with Democrats on speculation, it is clear to me -- and most economists -- that the real reason for the high price of oil is a global supply and demand imbalance. For that reason, I believe that any legislation considered by the Senate should seek to address supply and demand.
“While it is unclear at this point whether the Majority Leader will allow amendments to his bill, it is my intention to introduce an amendment that would seek to lift the moratorium on deep sea exploration. My amendment would allow states to opt into exploration if they choose, providing states with a substantial source of revenue and providing America with much needed domestic oil. Since the President has already lifted the Executive Moratorium on offshore exploration, Congress is the last remaining obstacle. I believe the American people want to see the Senate debate and vote on this issue, and as the floor manager for Republicans on this bill, I intend to do everything in my power to make it happen.”
Access a release from Senator Reid with a summary of the legislation (click here). Access the 7/17 release from Senator Domenici (click here). Access the 7/21 release from Domenici (click here). Access legislative details for S. 3268 (click here). [*Energy]
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