For Immediate Release
Congress Must Reregulate Energy Markets To Stop Wild Swings in Oil Prices
Speculators Are Responsible for Market Turmoil, Public Citizen Energy Director Tells House Committee
WASHINGTON - Congress must reregulate the energy markets if it wants to prevent
speculators from causing massive swings in oil, gasoline, natural gas,
electricity and other energy prices, which hit $147 a barrel in July
before dropping 75 percent in just five months, Tyson Slocum, director
of Public Citizen’s Energy Program, told a U.S. House committee today.
The wild energy market fluctuations cannot be explained purely by
supply and demand; rather they were the result of the speculative
bubble bursting, triggered by the Wall Street financial crisis and the
resulting tightening of the credit market, said Slocum, who appeared
before the U.S. House Committee on Agriculture.
"If Congress does not move quickly to regulate the energy futures
market, it’s only a matter of time before speculators once again
exploit American consumers," Slocum said. "Regulatory reforms to
strengthen oversight over the nation’s energy trading markets are
sorely needed to restore true competition to America’s oil and gas
markets. And limiting the ability of speculators like Goldman Sachs and
Morgan Stanley to control refineries, pipelines and storage facilities
will reduce their ability to manipulate prices."
Slocum urged Congress to take a two-pronged approach to stabilizing
energy prices and bringing relief to consumers. Lawmakers should
provide incentives to help families reduce their dependence on fossil
fuels by providing them tax breaks to purchase hybrid vehicles, install
solar panels and make energy-efficient improvements to their homes, and
make mass transit more available, he said.
Second, Congress must restore transparency to the futures market,
where energy prices are set. Stronger regulations over energy trading
markets would reduce the level of speculation and limit the ability of
commodity traders to engage in anti-competitive behavior that is
contributing to the record high prices Americans have faced. This
includes imposing firewalls to limit energy trading firms from
speculating on insider information gleaned from their affiliates
involved in the storage, transporting or processing of energy.
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