Today, U.S. Senator Maria Cantwell (D-WA) released the following statement on President Obama's new proposals to strengthen oversight and curb speculation and possible manipulation in oil markets.
"I applaud President Obama for working to ensure we have the tools in place to stop excessive speculation that drives up prices at the pump," Cantwell said. "We need clear and transparent markets that protect American consumers. The President is right to call for increased penalties for illegal market manipulation and to ensure the CFTC has the resources needed to be a strong policeman on the beat.
"In the Wall Street Reform law and the 2007 Energy Bill, we gave the financial cops the tools they need to rein in manipulation and rampant oil speculation. We need to ensure that these programs get the support necessary to enforce the law and protect consumers."
Cantwell has long fought to prevent market manipulation and excessive speculation from artificially driving up the price of oil and prices faced by consumers at the pump. During 2010's financial market reform debate, Cantwell successfully pushed for tough and effective rules and the elimination of loopholes to prevent speculators from manipulating the oil market.
She fought to ensure that the bill required the Commodity Futures Trading Commission (CFTC) to enact position limits to diminish, eliminate or prevent excessive speculation that disrupts the market. Mandatory speculative position limits and strong anti-manipulation tools were key to Cantwell's eventual support of the Wall Street reform law.
CFTC Chairman Gary Gensler praised Cantwell's work in giving the CFTC new authority to crack down on fraud and manipulation. "I thank Senator Maria Cantwell for her work to secure this important authority for the CFTC," Gensler said in July. "As Senator Cantwell explained in proposing that this authority be included in the Commodity Exchange Act, "It is a strong and clear legal standard that allows regulators to successfully go after reckless and manipulative behavior.'"
Using the lessons learned from a decade of fighting to protect Washington state ratepayers, including her historic battle to expose the ways Enron manipulated West Coast electricity markets to jack up prices, Cantwell helped author provisions in the 2005 Energy Bill that made it a crime to manipulate electricity or natural gas markets. To date, the Federal Energy Regulatory Commission (FERC) has used the law to conduct 199 investigations resulting in 61 settlements and civil penalties of $302,000,000 and disgorgement of profits totaling $155,036,000.
Cantwell also secured a provision in the Energy Policy Act of 2005 that prevented a bankruptcy court from forcing Snohomish Public Utility District (PUD) and its customers to pay millions of dollars in termination fees for electricity that was never delivered.
This measure reaffirmed FERC's authority to decide whether charges related to manipulated power contracts could be deemed invalid.
Cantwell has been an advocate for reining in excessive oil speculation, calling on federal regulators to implement overdue rules in the energy futures markets.
At a Senate Finance Committee hearing last May Exxon Mobil Chairman and Chief Executive Officer Rex Tillerson admitted to Cantwell that at the time, oil should have cost between $60 and $70 per barrel. Tillerson said that would be the price of oil if it were based on supply and demand fundamentals. Numerous experts have concluded that excessive trading in oil futures is causing oil price volatility unrelated to supply-and-demand fundamentals, and contributing to rising gas prices.