Yesterday, Congresswoman Julia Brownley (D-Westlake Village) offered a bipartisan amendment to H.R. 992, the so-called Swaps Regulatory Improvement Act.
"Every time there's a gas price hike, it directly impacts our local and national economy. My amendment would ensure that consumers, families, specialty crop growers, and other businesses throughout Ventura County are protected from reckless speculation that is driving up the price of gas at the pump. Predictable and stable energy prices are critical to the ability of families and businesses to plan for the future, which is essential to growing our economy."
The Brownley amendment called for regulators to continue to be able to go after excessive speculation and manipulation of oil and biofuel prices. It also clarified that bank regulators have the authority to stop manipulation in commodity markets. Unfortunately, Republicans defeated this common-sense amendment in a vote of 190-223.
Speculation in the energy sector is a very real, and very serious problem. Volatility in oil markets since 2008, and more recently in biofuels, leads to dramatic price swings, causing pain for every American at the pump. In September, the New York Times reported that prices for biofuel credits had recently surged 20-fold in just six months. Because of these problems, many Members of Congress -- on both sides of the aisle -- have called for investigations into both oil and biofuel price manipulation.
Earlier this year, both the E.U. and U.S. authorities began looking at oil price manipulation, which not only affects the price at the pump, but also artificially increase prices on everything from food to manufactured goods. According to the Energy Information Agency, 71% of the price of a gallon of gas and 63% of the price of diesel is directly related to the price of crude oil. Thus, there is no doubt that speculators who drive up the price of crude oil are impacting the price at the pump.