Blumenthal Cosponsors Bill To Force Emergency Action On Gas Prices

(Washington, DC) – Today, Senator Richard Blumenthal (D-CT) joined a group of senators to introduce legislation directing federal regulators to invoke emergency powers to rein in crude oil market speculators responsible for rapidly-rising gasoline prices. The bill would set a 14-day deadline for the Commodity Futures Trading Commission (CFTC) to implement rules to stop excessive speculation. The proposal was introduced by Sen. Bernie Sanders (I-VT) and is cosponsored by Senators Richard Blumenthal (D-CT), Ben Cardin (D-MD), Al Franken (D-MN) and Amy Klobuchar (D-MN). 

"To combat excessive gas prices we need a crackdown on out of control speculation and gambling in oil markets," Blumenthal said.  "This agency - inactive for too long - must be compelled to act, stopping manipulation and abuses that cost consumers and endanger our fragile economic recovery.  Emergency powers of the CFTC must be used now to correct market dysfunction and disruption driving up prices at the pump."

The legislation was prompted by gasoline prices that are nearing $4 a gallon and the commission’s refusal to obey a Wall Street reform law that required tough trading limits to be in place by Jan. 17, 2011.

With supplies up and demand down, the recent surge in crude oil prices is widely attributed to speculators who control more than 80 percent of the energy futures market, a figure that has more than doubled over the past decade. 

Monday’s national average for regular gasoline was $3.87 a gallon. Supplies are greater today than three years ago, when the national average price for a gallon of gasoline was just $1.94.  The demand for oil in the U.S. is lower today than it was in April of 1997. 

Exxon Mobil, the American Trucking Association, Delta Airlines, the Petroleum Marketers Association of America, and the Federal Reserve Bank of St. Louis all say excessive oil speculation significantly increases oil and gasoline prices. Citing a recent report from the investment bank Goldman Sachs, a Feb. 27, 2012, article in Forbes said excessive oil speculation adds $.56 to the price of a gallon of gas.

The legislation calling for emergency action is identical to bipartisan legislation that overwhelmingly passed the House of Representatives by a vote of 402-19 during a similar crisis in 2008.

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