Gas Prices

Floor Speech

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Mr. BLUMENTHAL. Mr. President, yesterday the average price of gasoline in Connecticut topped $4 a gallon--the fifth highest average price in the country. Across the Nation, prices are fast approaching that amount for every American. The rising cost of gasoline is a real, harsh, and unacceptable fact of life for ordinary Americans. It is crushing to the average consumer, it is stifling economic growth, and it is hurting our businesses. For people across the country, ordinary Americans or middle-class, these dramatic increases are not a luxury. It is more than an inconvenience. It threatens their ability to go to work, to do their work, and it drives up the prices of goods for all kinds of commodities, not just gasoline. It threatens to derail our economic recovery.

Many factors contribute to the price of a gallon of gasoline. There is no question that it is complex. There is a growing consensus among energy analysts that a large part of the reason has to do with speculation. I am mindful of the fact that there are a lot of experts and a lot of debate on different sides of this issue, but there is a powerful and growing consensus that speculation is a major cause of the rising cost of gasoline.

In fact, there is a list of businesses, government organizations, and trade associations that have undertaken their own study and investigation of the oil futures market. Let me list them for you: ExxonMobil, the Petroleum Marketers Association of America, Goldman Sachs, the American Trucking Association, the Consumer Federation of America, Delta Airlines, the International Monetary Fund, the St. Louis Federal Reserve. What do they all have in common? They have all indicated that excessive oil speculation significantly increases oil and gasoline prices. In fact, according to a recent article in Forbes--that is based on a report from Goldman Sachs--excessive oil speculation ``translates out into a premium for gasoline at the pump of $.56 a gallon.''

The Chairman of the Commodities Futures Trading Commission has stated publicly that Wall Street speculators now control more than 80 percent--in fact, as much as 85 percent--of the energy futures market, a figure that has more than doubled over the last decade. In short, people are buying contracts for future delivery of oil or gasoline they have no intention of ever taking delivery of.

Something is not working in the markets. Demand has dropped; consumption has been reduced; supply is at least at the level it was last year; yet prices are rising. The excessive oil and gasoline speculation is clearly causing market disturbances that prevent the market from accurately reflecting the forces of supply and demand. It is vital that the government use every available resource to protect Americans from markets that are not working, from price-gouging or price-fixing or illegal manipulation. The causes of the market disruption must be confronted.

Last April, the Attorney General announced the formation of a Financial Fraud Enforcement Task Force working group--I will repeat that--Financial Fraud Enforcement Task Force working group--that was specifically empowered to combat illegality in these markets.

I wrote to the Attorney General last May in the wake of the appointment of that task force, telling him respectfully that ``announcing investigations and beginning to issue subpoenas could curb some of the worst speculative activity that may well be underway at this very moment.'' I believe now that this task force has the authority, it has the mandate, it has the responsibility, and it has the obligation to be effective.

We have heard virtually nothing about it over this last year. We have heard of no investigation, no action, and certainly no prosecution. Now is the time it should be active. That is the reason I have again written to the Attorney General, and I ask unanimous consent that the letter be printed in the Record.

There being no objection, the material was ordered to be printed in the Record,

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Mr. BLUMENTHAL. I am seeking from the Attorney General that this task force be proactive and effective by beginning investigations and taking whatever action is necessary to combat illegality in these markets.

I believe if the Attorney General of the United States makes vigorous and effective use of his task force's broad investigatory and regulatory authorities, he can send the signal to speculators that manipulation and fraud in the oil futures market will not be tolerated.

These gasoline prices are on the minds of Americans across the country. They have economic effects, but they also have effects on consumer confidence and on the lifeblood of economic recovery. Even more than the share of dollars that go to pay for gasoline at the pump, there is an effect on consumer confidence.

This obligation on the part of our law enforcers is one that goes to the core of their credibility--not just popularity. Credibility of law enforcement demands that the Attorney General of the United States take this action to reenergize and revive the task force. I am hopeful, knowing of his reputation, that he will act accordingly to assure all of us that illegality, whether it is price-fixing or price-gouging or cornering the market, will not be tolerated and that effective action will be taken against it.

Thank you, Mr. President. I yield the floor and I note the absence of a quorum.

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