Jumpstart Our Business Startups Act

Floor Speech

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Mr. CONNOLLY of Virginia. Mr. Chairman, this important amendment will help small and emerging growth businesses address a significant cost they incur--the rising price of gasoline. According to the National Federation of Independent Businesses, 10 percent of businesses say energy costs are their single largest cost, and 25 percent cite it as the second or third largest.

Although some argue for increased domestic drilling, at best it will take 5 years before new supplies are brought to market and have any effect on the current price of gasoline. Meanwhile, oil companies are producing more oil in America right now than at any point in the last 8 years; but since they're also exporting more oil, consumers aren't realizing the benefits of that production. Approving the Keystone XL pipeline, as some have proposed, actually would make gas prices even worse. The oil company TransCanada said in its pipeline application that Keystone will raise American oil prices by $3 a barrel. The price of a gallon of gasoline has risen 30 cents per gallon in the last month, and we need to drive down prices, not allow them to increase.

There are a number of factors involved in the rapidly increasing price of gasoline; however, one of the significant causes is the proliferation of financial market speculation on oil and gas products. During the last gas price spike, Goldman Sachs estimated that speculation added $27 to the price of a barrel of oil. Just last week, oil State Senator Tom Coburn of Oklahoma told the House Oversight and Government Reform Committee, on which I sit, the speculation is adding 13 to 15 percent to the price of a barrel of oil right now. And citing Goldman Sachs data, a recent Forbes news report said that excessive speculation leads to a 56-cent premium per gallon at the pump.

We cannot have financial institutions bidding up the price of oil solely to further line their own pockets and needlessly drive up cost to consumers. Domestic demand for oil is at its lowest point in the last 15 years, but the price of gasoline is hitting new highs.

The Commodity Futures Trading Commission is working to address oil and gas speculation, but they need to be more aggressive. I joined 44 Members of this House and 23 Senators in sending a letter to the CFTC to exercise its full authority to eliminate excessive speculation, as directed under the recently passed Dodd-Frank Act. This amendment will provide valuable information on how such speculation affects the ability of emerging growth companies to raise capital.

Access to capital remains a challenge for most entrepreneurs, and uncertain and often rising energy costs represent a potential impediment for start-up companies trying to convince prospective investors that they have in fact a competitive business model.

My simple amendment requires the Securities and Exchange Commission, in consultation with the CFTC, to study the effects of oil and gas speculation in financial markets on the ability of emerging growth companies to access capital. This will enable the CFTC to better address such speculation and to better protect the ability of American entrepreneurs to raise the capital necessary to innovate and succeed in the competitive global market.

I urge my colleagues to join me in the simple effort to study the excessive speculation and hopefully reduce energy costs for American innovators and consumers.

With that, I reserve the balance of my time.

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Mr. CONNOLLY of Virginia. Well, I'm saddened, but of course not surprised, that my friend on the other side would not want a simple amendment to study the effect of oil speculation on the price of oil because it doesn't fit the political narrative. So while we're trying to have a very narrow narrative that somehow it's the responsibility of a particular administration in terms of the rise in the price of oil, I think the American consumer and American innovators and American start-up companies and entrepreneurs are actually entitled to know what percentage of the increase in a barrel of oil and at the pump is in fact due to oil speculators and financial institutions that the other side of this House wants to protect.

With respect to the Keystone pipeline--with all due respect to my colleague--it's 5,000 jobs, not 20,000 shovel-ready jobs. The Washington Post did an exhaustive study of the number of jobs that would be created, and they were all temporary. At most, 50 to 60 permanent jobs would be created.

The other thing my friends on the other side of the aisle don't want to talk about about Keystone is that almost all of that oil is going to go to Port Arthur, Texas, for export, not for domestic consumption. If my friends on the other side of the aisle want to contend otherwise, then let's support an amendment right here and now that says that pipeline can be produced and built so long as all of that oil is for domestic consumption.

With that, I yield back the balance of my time, Mr. Chairman.

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