COLUMBUS, OH – With gas prices near $4.00 per gallon—and the release of a recent report showing that excessive Wall Street betting adds a 56-cent premium to every gallon of gasoline— U.S. Sen. Sherrod Brown (D-OH) unveiled a new plan to give the Administration authority to take emergency actions to stop Wall Street Speculation.
“Excessive oil speculation and rising gas prices hurts virtually all Ohioans—from parents driving to work or dropping the kids off at school to the entrepreneur trying to keep her small business alive. Higher fuel costs get passed along the production line, ultimately making food and other necessities more expensive at a time when working families are already struggling to make ends meet,” Brown said. “We’re seeing gas prices rise long before the peak summer driving season—and excessive oil speculation is a key source of these cost spikes. In fact, one recent report showed that out-of-control speculation adds 56 cents to every gallon of gasoline siphoned from the pump—and that’s outrageous.
“We cannot afford to sit idly by while Wall Street and Big Oil get richer and Ohio’s families and small business owners foot the bill,” Brown added.
Oil speculation occurs when prices are driven by investor activity, rather than traditional market forces. During a press conference at Shell Gas Station today, Brown outlined his legislation, the Energy Markets Emergency Act, which directs the Commodity Futures Trading Commission (CFTC) to utilize emergency powers to eliminate excessive Wall Street oil speculation.
Brown was joined by Christina Jones, a central Ohio mother who owns Bella Luna Cakes and Confections. The high price of gasoline is affecting her business and household budgets.
Brown’s Energy Markets Emergency Act would:
- immediately curb the role of excessive speculation in any contract market within the jurisdiction and control of the Commodity Futures Trading Commission, on or through which energy futures or swaps are traded; and
- eliminate excessive speculation, price distortion, sudden or unreasonable fluctuations or unwarranted changes in prices, or other unlawful activity that is causing major market disturbances that prevent the market from accurately reflecting the forces of supply and demand for energy commodities.
Brown is working to lower gas prices for Ohio’s families and small businesses. Brown has repeatedly pressed the CFTC on speculation, urging the agency to use its full authority to protect consumers and small businesses from artificially-inflated gas prices. The Wall Street reform bill requires strict limits on speculation to have been enacted by January 2011, but no regulations yet exist to protect Ohio consumers from these risky Wall Street bets and rising gas prices.
The CFTC has passed final “position limits” rules, which will not go into effect until the CFTC issues subsequent rules, which could delay implementation for months. Brown is urging the CFTC to enact now-overdue regulations to protect consumers and small businesses from artificially-inflated gas prices. Earlier this month, he released a letter to the CFTC, cosigned by 70 other Members of Congress and Senators, urging it to immediately enact strong limits of speculation to protect Ohio consumers from excessive Wall Street betting that leads to high gas prices. At an Appropriations subcommittee hearing this month, Brown asked U.S. Attorney General Eric Holder about the work of the Oil and Gas Price Fraud Working Group, a task force designed to examine oil speculation. The task force was formed in April 2011, but no findings have ever been reported to the public.
In January 2011, Brown wrote to the CFTC urging the agency to use its full authority under the recently-passed financial reform bill to protect consumers and small businesses from artificially inflated gas prices.
He is also a sponsor of the No Oil Producing and Exporting Cartels (NOPEC) Act, which would give the U.S. Attorney General the authority to pursue legal action against oil-producing nations, like the Organization of the Petroleum Exporting Countries (OPEC), that band together to manipulate the price of oil, natural gas, or any petroleum product. The bill clarifies that OPEC's activities are not protected by sovereign immunity and that the federal courts should not decline to hear such a case based on the "act of state" doctrine. This would enable the Department of Justice to take action against foreign states for colluding to set the price or limit production of oil. He has also called on U.S. Secretary of State Hillary Clinton to push Organization for Petroleum Exporting Countries (OPEC) to increase production levels.