[Congressional Record Volume 158, Number 45 (Monday, March 19, 2012)]
[Senate]
[Pages S1773-S1774]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               GAS PRICES

  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

[[Page S1774]]

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, as follows:

                                                   March 18, 2011.
     Hon. Eric H. Holder, Jr.,
     Attorney General of the United States, U.S. Department of 
         Justice, Pennsylvania Avenue, NW., Washington, DC.
       Dear Attorney General Holder: Just yesterday, the average 
     price of a gallon of gas in my home state of Connecticut 
     topped $4 a gallon, the fifth-highest average price in the 
     country. The rising price of oil is putting a significant 
     financial strain on millions of Americans. Oil prices are at 
     their highest levels since 2008; gas prices are up an average 
     of 12 percent in 2012, and the national average price of 
     gasoline is now over $3.74 a gallon.
       Given this situation, it is vital that the government make 
     use of every resource available to protect Americans from 
     price-gouging. For many consumers, the dramatic increase in 
     price for a commodity upon which they rely is more than an 
     inconvenience: It limits their ability to get to work, drives 
     up prices for goods of all kinds, and threatens to hinder our 
     nascent economic recovery.
       While many factors contribute to the price of a gallon of 
     gasoline, there is a growing consensus among energy analysts, 
     independent observers, and businesses that operate in the oil 
     futures market that excessive speculation is contributing 
     significantly to these spikes in oil prices. I am very 
     troubled by this prospect.
       We must make every effort to ensure that Americans pay fair 
     prices for gasoline and heating oil, and that the markets for 
     these commodities operate without manipulation or fraud.
       Last April, you announced the formation of a Financial 
     Fraud Enforcement Task Force Working Group, charged with 
     focusing on fraud in the energy markets. I believe that the 
     recent run-up in prices in the oil futures market requires 
     more aggressive, muscular investigation and prosecutorial 
     action to crack down on possible widespread wrongdoing that 
     distorts the markets and drives prices higher. By making 
     vigorous and judicious use of your Task Force's investigative 
     and regulatory authorities, you can send a signal to 
     speculators that excessive manipulation and fraud in the oil 
     futures market will not be tolerated.
       In May of last year, I wrote to you following the creation 
     of this Task Force. Citing the Department of Justice's wide-
     ranging criminal and civil authority to investigate and 
     prosecute fraud and price manipulation, I maintained that 
     ``announcing such investigations and beginning to issue 
     subpoenas could curb some of the worst speculative activity 
     that may well be underway at this very moment.'' I continue 
     to believe that is the case, and I am hopeful that a renewed 
     focus by the Task Force will help restore some stability to a 
     market upon which millions of Americans rely.
       Thank you for your attention to this important matter. I 
     look forward to your reply.
           Sincerely,
                                               Richard Blumenthal,
                                                      U.S. Senate.

  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.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Ms. COLLINS. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Blumenthal). Without objection, it is so 
ordered.

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