The following piece by Sen. Ben Cardin (D-Md.) was circulated recently to numerous publications by the Maryland AFL-CIO.
Millions of American families are feeling the burden of ever increasing gas prices. I join them in their anger and frustration over the rising price of gas, and I want to do something about it. I recently joined a group of my Senate colleagues in sponsoring a bill, S. 2222, which will give federal regulators immediate authority to invoke emergency powers to rein in speculators who are responsible for rapidly rising gasoline prices.
There is broad agreement among energy experts and economists that speculators are one of the causes for the rapidly rising price of gas. Domestic oil production has risen to its highest level in a decade, oil supplies are greater today than they were three years ago and demand for oil in the United States is lower today than it was in 1997. Yet gas prices continue to soar.
There is something wrong with this equation. There is no logical reason why gas prices should continue to rise if oil supplies are up and demand is down.
The American Trucking Association, Delta Airlines, the Petroleum Marketers Association of America, the Federal Reserve Bank of St. Louis, and other experts all say excessive oil speculation in the futures markets significantly increases crude oil and gasoline prices. A Feb. 27, 2012 article in Forbes Magazine cited a recent report by the investment bank Goldman Sachs pointing out that excessive oil speculation adds 56 cents to the price of a gallon of gas.
This “speculators” bill would set a 14-day deadline for the Commodity Futures Trading Commission (CFTC) to take emergency steps to stop excessive speculation by Wall Street traders in the crude oil, gasoline and other energy futures markets. Also co-sponsoring the measure are: U.S. Senators Bernard Sanders (I-VT), Richard Blumenthal (D-CT), Sherrod Brown (D-OH), Al Franken (D-MN), Amy Klobuchar (D-MN) and Bill Nelson (D-FL).
Today, speculators control more than 80 percent of the energy futures market, a figure that has more than doubled over the past decade. As gasoline prices near or surpass $4 a gallon, the CFTC still has not complied with a provision in the Wall Street reform law that required the agency to establish trading limits by Jan. 17, 2011.
It is time to take decisive action now to stop financial speculators who are helping drive up prices for all of us at a time we can least afford it.
Photo: Despite an increase in domestic oil production, prices continue to rise. Pablo Martinez Monsivais/AP