As broken first on "Hurley in the Morning"
7:45 a.m.
Thursday, June 19, 2008
For Immediate Release
June 19, 2008
LoBiondo Leads Legislation to Curb Runaway
Speculation in Oil Markets
Congressman is Lead Republican on Bipartisan
Attempt to Address Energy Crisis
WASHINGTON, D.C. – Concerned
with the affects of the increasing price of fuels on South
Jersey families and small businesses, U.S. Representative
Frank A. LoBiondo (NJ-02) has joined with Representative
John B. Larson (CT-01) on bipartisan legislation that would
prohibit unregulated speculation in the energy futures
market. Currently, so-called “pen-and-paper” speculators,
who have no association with energy-producing companies nor
assume physical control over inventories of crude oil,
heating oil or diesel fuel, are permitted to sell and resell
energy contracts without ever taking delivery of the
commodity (i.e. barrel of oil etc).
The “Consumer Price
Protection Act” would limit participation in energy futures
markets to those who either produce or take delivery of
energy supplies. Corporations, such as the airline industry
and utilities companies who seek to lock in the best price
for energy supplies, would not be affected by this
legislation.
“From our families to our
businesses, everyone is feeling the financial strain from
increasing fuel costs. When we see oil prices spike not
because of the demand by consumers, but because of the mere
speculation by energy traders, then every American should be
outraged and Congress is required to act,” said LoBiondo, an
original cosponsor of the legislation. “This legislation is
critical to bringing fairness, stability and transparency to
the energy futures market which will, in turn, provide
relief to consumers from unjustified spikes in fuel costs.”
“I recognize the role that
speculators play in a functioning market. But with the
volume of trades and amount of money in today’s market, that
role has been grossly distorted,” said Representative John
B. Larson (CT-01), Vice Chair of the Democratic Caucus. “I
know that this is a bold step. But, given the gravity of the
current situation, bold action is exactly what’s needed.”
Since 2000, investment in
oil futures has increased from $9 billion to $250 billion.
Energy experts, including those at the Energy Information
Administration, estimate that speculation is currently
adding anywhere from 10 to 100 percent to the true cost of a
barrel of oil. Current law exempts certain transactions,
including energy futures speculation, from the Commodities
Futures Trading Commission’s (CFTC) oversight. The “Consumer
Price Protection Act” would seek to remove that exemption,
allowing the CFTC to remove excess speculation and increase
transparency in the market. This, in turn, has the
possibility to noticeably lower gas prices for consumers.
Fellow New Jersey
Representative Chris Smith (NJ-04) is also a cosponsor of
H.R. 6264, the “Consumer Price Protection Act.”
Earlier this week,
LoBiondo joined with fellow Representative Mike Castle
(DE-at-large) in a letter to Environmental Protection Agency
Administrator Steve Johnson urging that the Agency
Aaccelerate
the development of biofuels made from wood waste, crop
waste, and other materials that do not divert food and feed
from domestic and international supplies.@
Joined by 56 of their colleagues in the letter, Castle and
LoBiondo have been strong proponents of diversifying energy
sources to include ethanol production based on vegetable
byproducts and alternative energies such as solar and wind.
# # #
Jason P. Galanes
Communications Director
Congressman Frank A. LoBiondo
(NJ-02)
202.225.6572 (office)
202.374.1914 (cell)
202.225.3318 (fax)
2427 Rayburn House Office
Building
Washington, DC 20515
www.house.gov/lobiondo
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