WASHINGTON — Connecticut Congresswoman Rosa L. DeLauro is focusing on congressional action to close loopholes that may be responsible for market manipulation of the oil and gas markets and/or excessive speculation.
DeLauro spoke on the floor of the U.S. House or Representatives in support of Energy the Markets Emergency Act expected to be passed by the House that would direct the Commodity Futures Trading Commission to use its emergency authority under the Commodity Exchange Act to restore order to the market to ensure that prices are fair.
Last week, DeLauro and Maryland Congressman Chris Van Hollen introduced legislation to squelch the rampant speculation contributing to skyrocketing oil and gas prices.
The Energy Markets Anti-Manipulation and Integrity Restoration Act would curtail the explosion of unregulated trading activity currently distorting today’s energy markets.
“Last October, the Government Accountability Office issued a report indicating that the Commodity Futures Trading Commission did not have the resources and the authority it needed to protect the America people,” said DeLauro.
“When the report was issued a gallon of gas cost on average $2.90. Today, in my state of Connecticut, gas costs $4.37 a gallon.
“Commodities prices have increased more in the last few years than ever before. In the past, price spikes have always resulted from supply crises, but experts have testified that this time something else is happening.
“The supply is there, but the prices are still rising. So what is the cause?
“A big part of it is unregulated speculation in our futures markets. Professional investors pouring billions of dollars into our commodity futures markets, betting that prices will rise.
“Well, enough people make that bet — and make it big enough — and their own actions have the power to drive prices up even further.
“Lately speculators have made their presence felt — purchasing contracts for more than a billion barrels of petroleum — essentially adding eight times as much demand for oil as the U.S. has added to its Strategic Petroleum Reserve over the last five years.
“And these days, the problem is not only the number of people making these bets, but where they are making them on unregulated markets and easy-to-find loopholes.
“We know it is the Commodity Futures Trading Commission that should be preventing both out-of-control speculation as well as direct market manipulation by interested parties with special access or information. But the sad fact is, the commission may be partly to blame.
“In some cases, it has granted Wall Street banks significant exemptions from important regulations as long as they make their trades as over-the-counter swaps.
“That is why today the House is acting to urge the CFTC to use its emergency powers.”