WASHINGTON, D.C. – With gas prices rapidly on the rise due to political instability abroad, U.S. Sen. Sherrod Brown (D-OH) held a news conference call today where he called on U.S. Secretary of State Hillary Clinton to push Organization for Petroleum Exporting Countries (OPEC) to increase production levels. Following the call, Brown released an analysis demonstrating the rise in Ohio gas prices in recent months.
“For small business owners, high gas prices don’t mean high profits; instead, it cuts into already razor thin margins. Our recovering economy is at risk of being undermined by artificially high oil prices – whether from rampant oil speculation from investors, or a lack of production by OPEC,” Brown said. “That’s why I’ve urged Secretary of State Clinton to push OPEC to increase its production to levels that ensure fair prices for consumers – and a stronger road to our economic recovery. Increased production will not only allow for our recovery to continue, it will also send a positive signal to the global marketplace.”
Last week, oil peaked at close to $120 per barrel last week and according to a study by the Pew Project on National Security, Energy and Climate. Average Ohio gas prices have increased by almost 30 percent over the last year and by more than 9 percent in the past week.
Rising gas prices also represent a national security concern. Every $10 increase in the price of oil costs the U.S. Department of Defense an additional $1.3 billion. With political unrest in the Middle East and North Africa, Brown sent a letter to Secretary Clinton to push OPEC to increase production to levels that will ensure our continue economic recovery.
Brown is working to lower gas prices for Ohio’s families and small businesses. Last month, Brown announced new plans for cracking down on oil speculation, which may be responsible in part for driving up prices at the pump. Last month, Brown sent a letter to the Commodity Futures Trading Commission (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.
Tomorrow, Sen. Brown will attend a hearing of the Senate Agriculture Committee, where CFTC Chairman Gary Gensler will outline reforms created by the Dodd-Frank Wall Street Reform Act. Brown will press Gensler on the CFTC’s actions to rein in excessive speculation in the energy and commodities markets.
Full text of the letter is below:
February 27, 2011
The Honorable Hillary Clinton
Secretary of State
U.S. Department of State
Washington, DC 20520
Dear Secretary Clinton:
Our efforts to get America’s economy moving again are at risk of being undermined by artificially high oil prices. Those who benefit the most from inflated prices, especially members of the Organization for Petroleum Exporting Countries (OPEC), must be convinced to raise production levels as part of a comprehensive strategy to take on this issue of global concern. The State Department must continue to push OPEC to increase production to levels that will ensure our continued economic recovery.
With gasoline averaging over three dollars a gallon and oil trading at more than $100 a barrel, multinational oil companies and unfriendly foreign regimes are taking money out of the pockets of already struggling consumers, farmers, and small businesses. This threatens ongoing economic growth, increases the price of food and necessities for working families, and creates a drain on capital that affects those at the lowest income levels the hardest.
The current political unrest in the Middle East and North Africa has undoubtedly played a role in the recent surge in oil prices. Despite recent reports that Saudi Arabia will increase production to replace some of the shortfall, it is my understanding that this alone is not enough to make up for lower outputs in other nations. Increased production will not only allow for our recovery to continue, it will also send a positive signal to the global marketplace.
I appreciate the work you and your staff have done in what has been a fast moving and complex change in the political institutions of the region. It is critical, however, that oil prices continue to reflect the true global demand and are not manipulated by energy cartels or financial speculators. We cannot allow OPEC to hinder our economic recovery, nor our efforts to develop our own alternative energy sources.
I look forward to continuing our work together.
United States Senator