Cracking down on speculators and hedgers

Tag : Power Supply Tester
Cracking down on out-of-control oilspeculators and hedgers is the first step toward lowering gasprices, Senator Jon Tester said today during a major speech onCapitol Hill.
The Senate today is debating the Stop Excessive Energy SpeculationAct. The measure would prevent Wall Street traders from making a"quick buck" by buying and selling barrels of oil they neveractually use. Many analysts say such trading leads to artificialsupply and demand, resulting in skyrocketing gas prices.
"Well-regulated speculation can help markets set a fair price for acommodity," Tester said. "Unfortunately under this administration,speculation and hedging have gotten way, way out of hand, drivingup the price of oil to record heights and squeezing the Americanconsumer like never before."
Tester, a member of the Senate Energy Committee, said the StopExcessive Energy Speculation Act is "only the beginning." He saidit's part of a "common sense" plan that includes renewable energy,conservation, and drilling for more oil "where it makes sense inAmerica."
"One of those places it makes sense to drill for oil is the Bakkenformation in eastern Montana and North Dakota," Tester said. Headded that the area holds as many as four billion barrels ofrecoverable oil, which will provide good-paying jobs at home. "Allyou need is a strong back, a calloused hand, a good work ethic anda clean record, and you can find jobs that start at $25 an hour."
But, Tester said, anyone who says America can drill its way out ofthe energy crisis "is not shooting straight."
Tester emphasized the need for investing in renewable energy likebiofuels and wind power. That's why he supported raising mileagestandards "for the first time in a generation" last year. And it'swhy Tester added a provision to the recently passed Farm Billgiving incentives to farmers who grow camelina, a plant whose oilcan be converted to biodiesel.
However the low-hanging fruit, Tester said, is energy conservationand efficiency, which he says is the "easiest and cheapest thingthat we can do to keep energy costs down."
"Folks, a hundred years ago the Model T got 25 miles per gallon,"Tester said. "Now a car gets 28 miles per gallon. Since that timewe've split the atom, sent men to the moon, developed computers,mapped the human genome, but we get the same fuel efficiency" Comeon. That's not right."
Tester's floor speech, as prepared for delivery, is below.
U.S. Senator Jon Tester
Floor Speech
July 24, 2008
Prepared for delivery
Mr. President, I rise today to call on the Senate to pass commonsense legislation to lower gas prices in America.
This week, the Senate will vote on legislation that will createmore oversight on the financial markets that are helping to driveup the cost of oil. I hope my colleagues will join me in voting topass it. It is the first step toward energy independence, butcertainly not the last.
In my home state of Montana, folks are hurting. The average priceof a gallon of gas in Montana is about $4.20. Diesel now costs onaverage $4.67 a gallon in the Big Sky State. My constituents needand deserve effective action from their national leaders to providerelief from this energy crisis.
Across Montana, desperate times are producing desperate measures.Driving to work or between cities is not a choice. It's anecessity. Snow is on the ground for a good part of the year, andyou need wheels to get around. Folks are paying with credit cardsat the pump, or getting second and third jobs to get by. They'recancelling vacations, driving less and buying smaller cars. Butit's not enough.
The Senate must provide relief at the pump. And there's no silverbullet. It's going to take a few common sense ideas - and a lot ofhard work - to diversify our portfolio.
I support a three-pronged plan:
1) Crack down on energy speculators manipulating the marketplacefor a quick buck;
2) Produce more fuel by drilling for oil where it makes sense inAmerica, and investing in renewable energy;
3) Encourage energy conservation for long-term energysustainability. That's the low-hanging fruit.
The Senate will soon vote on a common sense plan to crack down onoil market speculators and hedgers who break the rules. We've seenthese guys before with Enron and the housing bust. Folks on WallStreet who manipulate the market and give themselves raises whilegas prices are choking regular folks. It's time to put a stop tothis unfair manipulation.
Let me be clear about two points. First, not all speculation isbad. Well-regulated speculation can help markets set a fair pricefor a commodity. Unfortunately, under this administration,speculation and hedging have gotten way, way out of hand, drivingup the price of oil to record heights and squeezing the Americanconsumer like never before.
But when the price of oil skyrocketed this summer, it was notbecause of a sudden new increase in demand. Nor was it because OPECsuddenly decided to pump less. It was because of trading on WallStreet by folks who never intended to own a barrel of oil.
We owe it to every family struggling to meet rising gas bills,every farmer filling up his tractor, every trucker buying fuel tomove product-to make sure that this trading is fair and on thelevel.
Folks in Montana don't have a problem with anyone making a buck. Webelieve in the American dream. We will not put up with folks whogain the system.
I call on my Senate colleagues - Democrats and Republicans - tojoin together and pass the Stop Excessive Energy Speculation Act.This bill will strengthen the Commodity Futures Trading Commissionto crack down on Wall Street speculators in the oil market.
More watchdogs and more transparency will stop people from gainingthe system and artificially and unnecessarily driving up prices atthe pump.
We need this bill.
But when it comes to getting control of high gas prices, this isonly the beginning.
Beyond speculation, we need to drill for more oil in the placesthat make sense-right here in America. And production of renewablefuels must go hand-in-hand with drilling for more oil.
One of those places it makes sense to drill for oil is the Bakkenformation in eastern Montana and North Dakota. The Bakken Field isa place you're going to hear about again and again.
New technology is allowing smaller producers to extract more oil.There's more than four billion barrels of oil in the Bakken Field.It's hard work. But these are good jobs. And the salaries are goodtoo. And they're right here at home. All you need is a strong back,a calloused hand, a good work ethic and a clean record, and you canfind jobs that start at $25 bucks an hour.
The Bakken Field isn't the only place where drilling makes sense.Just last week the Interior Department finally opened up twomillion acres in the Alaska National Petroleum Reserve. And it isabout time.
It's all part of the puzzle to free America from the grip offoreign oil and lower the price of gas at the pump.
But Mr. President, anybody who tells you that we can drill our wayout of this problem is not shooting straight.
Congress has been debating whether to extend tax credits for wind,solar and other renewable energy sources. And we ought to start byextending the Production Tax Credit on a decade basis-not an annualbasis. It will result in long-term tax credits and long-termplanning for wind generation in this country.
Over the long haul, we all know that we cannot simply drill out ofthis problem. We must invest in conservation and sustainable energylike biofuels.
It's all part of the puzzle to free America from the grip offoreign oil, and lower prices of gas at the pump.
Earlier this summer, Congress passed the Farm Bill over thePresident's veto. That bill included hundreds of millions ofdollars for advanced biofuels. The Farm Bill also contains aprovision I was able to offer to encourage the production ofcamelina.
Camelina is a crop grown in Montana and other places that can beprocessed into biodiesel to run tractors, combines farm equipmentand diesel engines. The by-product of camelina makes a nutritiousfeed for livestock. Camelina truly is a win-win solution forrenewable energy. We need to encourage more of these common-sensekinds of solutions-answers to the energy crisis.
Finally, conservation must play a significant role in solving ournation's energy crisis. If we are ever going to free America fromthe grip of foreign oil, we must find real ways for consumers touse less fuel. Last year, Congress increased auto fuel efficiencystandards for the first time in a generation.
But it took 20 years of fighting and eventually a DemocraticCongress to get it passed. Those new standards will save 1.1million barrels of oil a day by 2020 or about as much produced bythe state of Texas.
Folks, a hundred years ago the Model-T got 25 miles per gallon. Nowa car gets 28 miles per gallon. Since that time we've split theatom, sent men to the moon, developed computers, mapped the humangenome, but we get the same fuel efficiency" Come on. That's notright.
Conservation is the easiest and cheapest thing that we can do tokeep energy costs down. Part of the energy tax package will helphomeowners and businesses make those savings themselves.
A bipartisan majority of the Senate supports that bill. But a smallminority keeps us from getting it done.
The State of Montana recently announced an initiative to helpcitizens increase insulation in preparation for next winter's highheating bills. These are all steps in the right direction, but wehave more work to do to reduce energy consumption.
The United States is the largest single consumer of energy in theworld. We cannot continue on this unsustainable path. To do sowould be to forfeit our national security to countries like Russia,Venezuela, Nigeria and Saudi Arabia. That would be a tragic legacyto leave to our kids.
We need a comprehensive approach to bring down gas prices andaddress this energy crisis. We need to crack down on illegalspeculation and greedy hedging to manipulate the oil markets. Weneed to increase production of fossil fuels where it makes senseand develop renewables for the long haul. And we need innovativesolutions to reduce overall energy consumption.
Mr. President, some people think the economic pressure on themiddle class is all in their heads.
Folks in Montana know that this energy crisis is real and it's bad.The Senate must act now to pass constructive legislation to beginto bring down the price of energy at the pump. And it all stopswith passage of the Stop Excessive Energy Speculation Act.
Mr. President, I yield the floor.