6/18/2008 - Experts Confirm What Tom Allen Has Known All Along: Speculation Driving Up Oil Costs
FOR IMMEDIATE RELEASE: Wednesday, June 18, 2008
CONTACT: Rebecca Pollard (207) 772-4353
Tom Allen consistently fights for consumers while Susan Collins favors Big Oil, speculators
An expert testifying yesterday before a joint Senate panel confirmed what many already believe to be true - rampant speculation is driving up the cost of fuel. According to Mark Cooper, Director of Research for the Consumer Federation of America, speculation is driving up oil costs by as much as $40 a barrel or $1 per gallon.
Testifying before the Senate Committee on Agriculture, Nutrition, and Forestry in joint session with the Senate Appropriations Committee, Subcommittee on Financial Services and General Government yesterday, Cooper said speculation was estimated at $20 to $30 per barrel two years ago, noting we haven't learned our lesson about the necessity for regulation.
"The story has been told many times, but the lessons have still not been learned. The lack of effective prudential regulation of financial and commodity markets leads to excessive speculation that disrupts the economy and costs consumers hundreds of billions of dollars.
Two years ago the Senate Permanent Subcommittee on Investigations estimated the speculative premium at $20 -$30 per barrel, when the price was $77 a barrel. Today the premium is over $40 per barrel, or about $1 per gallon. An equivalent figure for natural gas would be in the range of $2.50 per thousand cubic feet.
"Over the past two years this speculative premium has cost the typical American household over $1,500 and the economy over $500 billion.
Sound, prudential regulation is the only near-term way to bring down gasoline and food prices because it will burst the speculative bubble that has taken hold of commodity trading."
"Mainers can be proud that they have Tom Allen on their side, fighting against the speculators and sponsoring critical legislation to protect consumers," said Maine Democratic Party spokeswoman Rebecca Pollard. "And they should remember that Susan Collins has voted against them while favoring Big Oil."
Tom Allen has consistently come down on the side of consumers and co-sponsored the Close the Enron Loophole Act. Susan Collins, meanwhile, has voted against pro-consumer measures like closing the Enron loophole and favoring Big Oil by opposing the windfall profits tax. The records are below.
Tom Allen's Record Fighting For Consumers:
Cracking Down on Speculation and Off-Market Trading. Tom Allen recently became an original cosponsor of H.R. 6238, bipartisan legislation that would require the Department of Energy to establish an interagency working group that would be responsible for producing a study identifying the factors that affect the price of crude oil and petroleum products. The working group would include members from the Federal Energy Regulatory Commission (FERC), the Federal Trade Commission (FTC), and other relevant regulatory bodies. The working group is expected to include representatives from the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).
Tom Allen also is a co-sponsor of the Close the Enron Loophole Act to prevent speculators from getting rich on the backs of consumers. Language on Closing the Enron Loophole recently passed the House and Senate as part of the Farm Bill, which Tom voted for.
Price Gouging Prevention. Tom Allen co-sponsored the Federal Price Gouging Prevention Act giving the Federal Trade Commission the authority to investigate and punish unscrupulous companies for ripping off consumers. This legislation passed in the House, but has stalled in the Senate by lawmaker allies of Big Oil.
Rollback Bush-Cheney Big Oil Giveaways. The 2005 Bush-Cheney energy bill amounted to $14 billion in tax breaks and incentive giveaways to Big Oil, even during a time when energy companies reported record profits. Because Tom believes Big Oil doesn't need or deserve breaks but that Mainers do, he voted against the legislation back then.
Susan Collins' Anti-Consumer Record:
Opposed Closing the Enron Loophole. In 2003, Senator Collins voted against an amendment to regulate online trading of energy derivatives and impose stringent penalties for market manipulation. Amendment sponsor Sen. Dianne Feinstein (D-CA) described her amendment as closing the "Enron loophole" by attempting to fix the Commodity Futures Modernization Act of 2000, which exempted energy trading from regulation in response to intensive lobbying by Enron. The exemption allows firms to buy and sell billions of dollars worth of electricity, natural gas, oil, gasoline, and other petroleum products without disclosing information on those deals to the Commodity Futures Trading Commission (CFTC).
The amendment would give the CFTC regulatory oversight of all derivative transactions of energy commodities, except for metals. It would subject electronic transactions to broad disclosure and transparency requirements, require electronic trading facilities and dealer markets to maintain sufficient capital to cover all operations, and require the CFTC and the Federal Energy Regulatory Commission to meet quarterly and discuss how derivative energy markets are functioning.
Most recently Senator Collins was the only member of the Maine delegation to vote against the Farm Bill, which included language on closing the Enron loophole.
Voted Against Imposing Windfall Profits Tax On Oil Companies. In 2005, Senator Collins voted against an amendment that would impose a temporary windfall profit tax on crude oil and to rebate the tax collected back to the American consumer.
Supported the Bush-Cheney energy bill in Congress that provided huge giveaways to oil companies. In 2005, Senator Collins voted for the Bush-Cheney energy bill that gave billions to oil companies.
