Stop Excessive Energy Speculation Act of 2008--Motion to Proceed

Floor Speech

STOP EXCESSIVE ENERGY SPECULATION ACT OF 2008--MOTION TO PROCEED -- (Senate - July 23, 2008)

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Mr. WHITEHOUSE. Mr. President, will you be kind enough to notify me when there is 30 seconds remaining so I can conclude without imposing on the other party's time?

Mr. President, today, Rhode Island drivers are paying more than $4 a gallon for gas, and they have been paying those prices for well over a month now. We all know that 8 years of two oilmen in the White House equals over $4-a-gallon gas, a nearly sixfold increase in oil prices.

These record oil prices have sent consumer prices skyrocketing, not only at the pump but at the supermarket and the department store. Food and household goods take energy to produce and transport and have become more and more expensive. While George Bush and DICK CHENEY's friends in the oil industry celebrate grotesque profits, ordinary Americans struggle to make ends meet. Families in Rhode Island and across the country are having to choose between filling their tank and feeding their families and between heating their home and buying needed medicine. They are frustrated, they are angry, and they are looking for solutions any way they can find them.

Unfortunately, rather than taking steps that will help consumers today, the Bush Republicans are now trying to harness Americans' anger and frustration and, of all things, use it to capture more inventory for big oil. The energy companies have already bought 68 million acres of public lands to drill, and they are sitting on it. They are spending more buying back stock than they are drilling these holdings. Now, rather than drill what they have, they want more.

The administration and its allies have said that opening more land to drilling is the one and only way to lower the price of gas in this country. That is flat wrong. The United States owns 3 percent of the world's oil reserves and consumes 25 percent of the world's oil. The measures endorsed by the administration and its allies would have zero effect on gas prices--zero effect for at least a decade. Even then, the Energy Information Administration projects these proposals aren't likely to make any significant dent in gas prices--cold comfort for Americans who have watched gas prices rise by about $3 a gallon while two oilmen occupied the White House.

We cannot drill our way out of this problem, now or ever. But that is not all. Even as the Bush Republicans say their only answer to our energy crisis is drill, drill, drill, they have repeatedly refused our good-faith offer to bring their proposal to a vote. If they are confident this is the right solution, then give each of us the chance to vote up or down, based on what we think is right for the people we represent.

Why not? Because as we have seen, time and time again, they are not interested in finding the right solution, in doing what is right by families who need help today. No, the Bush Republicans are much more interested in playing politics and pouring more money into the pockets of oil companies already reaping world record, history-of-the-universe profits. Their proposal would encourage our continued dependence on oil, harm our environment, and delay our badly needed transition to the vibrant green economy that beckons us. Make no mistake, if the Republicans would let us walk through this door, a vibrant green economy does beckon American workers and families.

We need real commonsense solutions that can make a difference now. One factor most economists believe has played a major role in driving up prices is rampant speculation in the commodities and futures markets, something we can address today. Speculators invest in oil futures with no intention of taking possession of the commodity itself. They have historically played a role in the marketplace, but under George Bush's watch, excessive and irresponsible speculation has exploded. Experts may disagree on whether speculators have run up the price of oil by 10, 30 or 50 percent, but there is broad and growing agreement that speculation is a serious problem and that fixing that problem can help bring gas prices down now.

Of course, the big oil companies, and those in Congress who support them, say the dynamics of supply and demand, not speculation, is the real cause of the massive price increases. There are two problems with that argument. First, we have heard testimony from experts who say there is no way that simple supply and demand for oil can explain the huge rise in energy costs that have plagued American families in the last several months. Second, energy speculation has its own supply and demand in the commodity market. According to data from the CFTC, speculators now control 71 percent of the oil market, up from 37 percent when President Bush took office.

The PRESIDING OFFICER (Mrs. McCaskill). The Senator has 30 seconds remaining.

Mr. WHITEHOUSE. I thank the Chair.

With relatively constant supplies of futures and the dramatically expanding demand of speculators, prices have nowhere to go but up. So I am here to support legislation that our colleagues have offered to get to the bottom of the energy speculation boom. Senator MARIA CANTWELL, in particular, has been a leader, but I wish to commend Majority Leader Reid for offering the Stop Excessive Energy Speculation Act of 2008, which would address the problem of excessive speculation.

In the time that remains, I will simply urge my colleagues to take a look at this problem. When there is $16 billion that used to chase these indexed futures funds and it is now over 300, clearly something is going on in these markets that we need to get a look at. We should regulate them the way we do other markets, such as grain.

These funds, which include university endowments and pension funds, may unknowingly be helping drive up prices by holding energy assets--commodities they don't intend to sell or consume--as part of broad investment strategies.

The amount of money in commodity-based index funds has exploded in recent years, rising from $13 billion in 2003 to $317 billion today, according to one estimate.

Leader REID's bill would bring to light the role of index traders in the energy market by requiring the CFTC to collect and publish data on their participation. Greater transparency combined with the new investigatory resources that this bill provides will help lower energy prices.

Do we know for sure that speculation is driving oil prices? Not for sure. But we do know two things--one, we regulate speculation in this commodity, oil, less than we do other commodities such as grain, and two, there is more than enough evidence of excessive speculation to prompt a reasonable and prudent person to act.

I hope the Senate will act quickly to pass legislation strengthening the government's authority to crack down on rampant speculation in the energy markets and call on my Republican colleagues to take action that will help consumers in the near term, instead of resorting to political gimmickry.

I appreciate the courtesy of the Chair, and I yield the floor.

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