[Congressional Record Volume 152, Number 90 (Wednesday, July 12, 2006)]
[House]
[Pages H5101-H5102]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
GAS PRICES
The SPEAKER pro tempore. Under a previous order of the House, the
gentleman from Michigan (Mr. Stupak) is recognized for 5 minutes.
Mr. STUPAK. Mr. Speaker, as Congress prepares to leave for the August
recess, American families are being forced to make significant
sacrifices just to be able to afford to drive to work, let alone try to
take their family vacation this summer. I find it appalling that this
body has not properly addressed high gas prices.
Over the Fourth of July, the national average price for a gallon of
gas was approximately $3.00. Gas prices in my northern Michigan
district exceeded $3.00, with many areas seeing a 20 to 25 percent
increase in gas prices in 24 hours from July 2 to July 3, just in time
for the July 4th holiday.
For almost a year now, we Democrats have been calling on the
Republican leadership to allow a real price gouging bill to be passed
into law.
One hundred thirty-five Members of this body have signed a discharge
petition requesting that my legislation, the Federal Response to Energy
Emergencies Act, the FREE Act, be brought to the floor for a vote.
After continuing lobbying from Democrats, Republicans finally
introduced their own legislation, which was called price gouging, and
it was a price gouging bill in theme only. That bill was passed by this
body in May, and it has been stalled in the other body, controlled by
the Republicans.
Unlike the Republican price gouging legislation, my bill, the FREE
Act, would specifically set guidelines for the Federal Trade Commission
to use to define price gouging, including provisions that would make it
illegal to have unconscionable pricing, providing false price
information, and market manipulation.
The FREE Act also contains a provision that would promote price
transparency, helping consumers to understand whether or not oil and
gas prices are fair and reasonable.
The FREE Act would also apply to natural gas and propane. Neither
natural gas nor propane is addressed by the Republican bill.
Despite efforts to sugar coat the Federal Trade Commission's report
recently released, called Invasion of Gasoline Price Manipulation and
Post-Katrina Gas Price Increases, the Federal Trade Commission did find
price gouging. Twenty-three percent of the refineries, 9 percent of the
wholesalers and 25 percent of the retailers charged significantly
higher prices. In other
[[Page H5102]]
words, they gouged the American people. And these prices were not
attributable to either increased costs or national or international
market trends.
Mr. Speaker, the American people are fed up. They know price gouging
when they see it and they are being gouged. The Federal Government has
responsibility to protect consumers from price gouging.
Price gouging legislation is long overdue. Congress needs to pass
legislation to allow the Federal Trade Commission to prosecute price
gouging.
Just as we must continue to work to protect consumers from gouging
and predatory pricing at the pump, we must also investigate the effect
that energy futures trading can have on gas prices.
Traditionally, trading of energy commodities such as crude oil,
gasoline, diesel fuel and natural gas has taken place on the New York
Mercantile Exchange, NYMEX, with oversight by the Commodities Future
Trading Commission. However, an increasing amount of trading does not
occur on NYMEX but in off-market deals known as over-the-counter
trading.
According to the bipartisan Senate Homeland Security Committee report
on oil and gas market speculation released on July 27, it says: ``As an
increasing number of U.S. energy trades occurs on unregulated over-the-
counter electronic exchanges or through foreign exchanges, the trading
reporting system becomes less and less accurate, the trading data
becomes less and less useful, and its market oversight program becomes
less comprehensive.''
It is estimated that up to 75 percent of all energy trades are now
over-the-counter, where speculation occurs without any regulation or
oversight by the Federal Government.
Without effective oversight, there is no way to know whether energy
speculators are basing their trades on market realities or instead
taking advantage of the system to make money at the expense of
hardworking Americans. Unregulated trades based on speculation, fueled
by fear, result in greed, as we can see from the record profits of the
oil companies.
In fact, a recent Justice Department investigation had led to charges
against traders for the energy conglomerate, British Petroleum. It is
alleged that several traders attempted to corner the market on propane
in a pipeline network that serves the Midwest and the Northeast in
order to drive up the price for propane in these areas. Court documents
show that they were at least temporary successful in driving up
artificially the price of propane.
Investigations into additional civil and criminal violations are
ongoing.
When speculators, motivated by greed, take advantage of markets to
drive up energy prices, the Federal Government must intervene to
prevent this manipulation from being passed on to the American
consumer.
Due to these concerns, I have introduce the Prevent Unfair
Manipulation of Prices (PUMP) Act, H.R. 5248 to bring Over the Counter
trading under the oversight of the Commodity Futures Trading
Commission.
The PUMP Act would require off-market speculators to play by the same
rules as on-market traders. This increased oversight will improve
confidence in the market and help eliminate the unreasonable inflation
of crude oil prices. The legislation would also increase penalties for
speculators found to be unfairly manipulating the oil futures market.
Some economists estimate that oversight over all futures trades would
lower the price of a barrel of crude oil by as much as $20.
Unfortunately, rather than proposing real solutions to bring down
energy prices, Republicans have instead continued to propose bills to
eliminate environmental standards, provide more tax breaks for bill
oil, and promote the Republicans' favorite solution: drill, drill,
drill.
I find it appalling that anyone could suggest that big oil needs more
breaks, given their exorbitant profits. And we can not drill our way
towards solving our addiction to oil.
Only by ensuring fair markets for American consumers and the
promotion of alternative fuels can we truly reduce energy prices.
Our constituents are looking to us, to Congress, for relief. It is
our duty to approve legislation that would provide real solutions, to
protect Americans from the increased financial hardship that price
gouging and high gas prices artificially created during the summer
tourism months.
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