[Congressional Record Volume 160, Number 101 (Thursday, June 26, 2014)]
[Senate]
[Pages S4158-S4160]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SANDERS (for himself, Mr. Blumenthal, Mr. Nelson, Mrs. 
        McCaskill, Mr. Levin, Mr. Cardin, Mr. Franken, Mr. Brown, Ms. 
        Baldwin, Mr. Whitehouse, Mrs. Shaheen, Mr. Markey, Mr. Merkley, 
        Ms. Klobuchar, Ms. Hirono, Mr. Manchin, Mr. Rockefeller, Mr. 
        Schatz, Ms. Warren, and Mrs. Boxer):
  S. 2548. A bill to require the Commodity Futures Trading commission 
to take certain emergency action to eliminate excessive speculation in 
energy markets; to the Committee on Agriculture, Nutrition, and 
Forestry.
  Mr. SANDERS. Mr. President, as we are about to begin the Fourth of 
July district work period in my State and throughout this country, many 
people are going to be getting into their automobiles and they are 
going to be traveling. In general, people who live in rural States such 
as Vermont don't have the option of getting on a subway. They don't 
have the option of getting on a bus to get to work. They use their 
automobile. In Vermont and all across this country, people who are 
driving have noticed that the price of gasoline at the pump has soared 
and is today much higher than it used to be.
  According to the Energy Information Administration, the national 
average retail price for regular unleaded gasoline is $3.70 a gallon--
the highest price for this time of year since 2008. According to the 
AAA, drivers in three States have paid over $4 a gallon at the pump for 
more than a month, and those States are Hawaii, California, and Alaska. 
In my home State of Vermont, the current average for a gallon of gas is 
about $3.73.
  When the price of gasoline goes up, a lot of people get hurt and the 
economy gets impacted. But mostly it affects working people who have no 
other option but traveling by car, and many of

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these workers are making $10, $12, $15 an hour; and many of these 
workers have seen declines in their wages in recent years. Yet, in 
order to get to work to make a living, they have to get in the car and 
they have no choice but to pay soaring gas prices.
  While gas prices are soaring, people should not be shocked or will 
not be shocked to know that the big oil companies, which have racked up 
$1.2 trillion in profits since 2001, are now telling us that the reason 
gas prices are going up is because of the volatile situation in Iraq. 
That is why suddenly gas prices have gone up--because of the conflict 
in Iraq.
  The American people are sick and tired of hearing from the big oil 
companies using every excuse they possibly can. If it is snowing, the 
price of gas goes up. If there is conflict in the Middle East, the 
price of gas goes up. If it is raining, if it is sunny, if it is 
somebody's birthday, the price of gas goes up. Interestingly enough, we 
don't see that same logic when the price of gas should be going down, 
but it always seems to be going up. Meanwhile, the five biggest oil 
companies in America--again, not too surprisingly--continue to make 
huge profits. During the first quarter of this year, ExxonMobil made a 
profit of $9.1 billion--the first quarter; Shell made $7.3 billion, 
Chevron made $4.5 billion, and ConocoPhillips made $2.1 billion. The 
price of gas at the pump soars and the major oil companies make huge 
profits.
  Last year, these five major oil companies--ExxonMobil, Shell, 
Chevron, ConocoPhillips--made $93 billion in profits. ExxonMobil alone 
made nearly $33 billion in profits in 2013.
  So in the State of Vermont and all over this country, working people 
are seeing, in many cases, declines in their wages. Yet they have to 
get to work. Meanwhile, the price of oil, the price of gas soars, and 
the oil companies make out like bandits.
  Here is the interesting point: When I was in high school--and I 
suspect kids all over the country are still being taught this--we 
learned about a theory called supply and demand. What supply and demand 
is about is when there is a lot of supply and limited demand, prices go 
down. When there is limited supply and a lot of demand, prices go up.
  Well, guess what. To nobody's surprise, that is not the way it works 
in the oil industry. Today, there is more supply and less demand for 
gasoline than there was 5 years ago when the average price of a gallon 
of gas was just $2.69 a gallon. So let me repeat that. More supply, 
less demand, and today the price of a gallon of gas is $3.70 a gallon, 
but 5 years ago it was $2.69 a gallon. Where is the logic of supply and 
demand? Where is that process?
  According to the EIA, there has been a 9 million barrel increase in 
the supply of gasoline over the past 5 years--a 9 million barrel 
increase. Since 2009, the United States has increased gasoline supplies 
by 4.3 percent. Supply has gone up. What about demand? According to the 
EIA, the United States is consuming 96,000 fewer barrels of gasoline 
than it did in 2009--a 1-percent drop in demand compared to 5 years 
ago. If the supply and demand theory were true, gasoline prices would 
be a bit lower--a bit lower--than they were 5 years ago--somewhere 
perhaps in the neighborhood of $2.69 a gallon. Instead, despite the 
increase in supply, despite the lowering of demand, the average price 
for a gallon of gas in the United States has gone up by nearly 38 
percent over the last 5 years, from $2.69 a gallon to $3.70 a gallon. 
Let me repeat. Since 2009 the supply of gasoline has gone up by more 
than 4 percent and demand for gasoline has gone down by 1 percent. Yet 
prices at the pump are up by nearly 38 percent.
  People say: We need more oil, we need more gas. It doesn't matter--
supply up, demand down, prices of gas at the pump soaring.
  The truth is the high gasoline prices have less to do with supply and 
demand and more to do with Wall Street speculators driving prices up in 
the energy futures market. Over a decade ago, speculators only 
controlled about 30 to 40 percent of the oil futures market. Today, 
Wall Street speculators control about 80 percent of this market. Let me 
repeat. Wall Street speculators control about 80 percent of the oil 
futures market, even though many of them will never use a drop of the 
oil. People think that when people own oil on the oil futures market, 
they actually own it because they are going to use it. Maybe it is the 
airline industry; maybe it is the trucking industry; maybe it is oil 
fuel dealers. Wrong. The oil futures market is controlled by 
speculators who never use the end product and whose only goal in life 
is to drive prices up to make a huge profit, and that is exactly what 
they do.
  We, as the elected officials of this country, who are presumably 
representing working families around America, have a responsibility to 
do everything we can to make sure the price of gasoline at the pump is 
based on the fundamentals of supply and demand and not Wall Street 
greed. That is why I am introducing legislation today to require the 
Commodity Futures Trading Commission to use all of its authority, 
including its emergency powers, to eliminate excessive oil speculation.
  This bill is cosponsored by Senators Levin, Nelson, Blumenthal, 
McCaskill, Franken, Brown, Cardin, Baldwin, Whitehouse, Markey, 
Klobuchar, Shaheen, Merkley, and Hirono. Congresswoman Rosa DeLauro is 
introducing the companion bill in the House. I thank all of these 
Members for their support.
  Our legislation, the Energy Markets Emergency Act, is identical to 
bipartisan legislation that overwhelmingly passed the House of 
Representatives by a vote of 402 to 19 during a similar crisis in June 
of 2008.
  Specifically, our bill directs the CFTC to do the following within 14 
days of enactment:
  No. 1: Immediately curb the role of excessive speculation in any 
contract market within the jurisdiction and control of the Commodity 
Futures Trading Commission, on or through which energy futures or swaps 
are traded.
  No. 2: Eliminate excessive speculation, price distortion, sudden or 
unreasonable fluctuations or unwarranted changes in prices or other 
unlawful activity that is causing major market disturbances that 
prevent gasoline and oil prices from accurately reflecting the forces 
of supply and demand.
  There is now a growing consensus--this is not just the opinion of 
Bernie Sanders--there is a growing consensus that excessive speculation 
on the oil futures market is significantly contributing to the high 
prices the American people are seeing at the pump.
  ExxonMobil, Goldman Sachs, the IMF, the St. Louis Federal Reserve, 
the American Trucking Association, Delta Airlines, the Petroleum 
Marketers Association of America, the New England Fuel Institute, the 
Consumer Federation of America, and many other organizations have all 
agreed that excessive oil speculation has significantly increased oil 
and gas prices.
  Just a few years ago, Goldman Sachs--perhaps the largest speculator 
on Wall Street--came out with a report indicating that excessive oil 
speculation is costing Americans 56 cents a gallon at the pump--56 
cents a gallon. I personally think that is a conservative estimate, but 
it is interesting that it comes from Goldman Sachs itself.
  The CEO--and what can we say--the CEO of ExxonMobil has testified in 
the past that he believes excessive speculation has contributed as much 
as 40 percent to the price of a barrel of oil.
  So what you are hearing is some of the Wall Street people--in a rare 
moment of honesty--acknowledging the impact of speculation. You are 
hearing the head of the largest oil company in America acknowledging 
the impact of speculation on gas prices. I think we do not need a whole 
lot of evidence to suggest this is a serious problem.
  Three years ago my office obtained confidential information about how 
much Wall Street speculators were trading in the oil futures market on 
just one day--and that day was June 30, 2008--when the price of oil was 
over $140 a barrel and gas prices were over $4 a gallon. Here is what 
some of the biggest oil speculators were doing back then, on just one 
day of trading: June 30, 2008. This goes on every day. One day: Goldman 
Sachs bought and sold over 863 million barrels of oil, Morgan Stanley 
bought and sold over 632 million barrels of oil, Bank of America bought 
and sold over 112 million barrels of oil, Lehman Brothers--obviously 
now bankrupt--bought and sold over 300 million barrels of oil, Merrill

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Lynch--bought by Bank of America--bought and sold over 240 million 
barrels of oil.
  The only reason these firms were betting on the price of oil was to 
speculate and to make money. Goldman Sachs, Bank of America, they do 
not use oil. Their only function in this process is speculation, 
driving up prices and making huge profits.
  The rise in oil and gasoline prices was entirely avoidable. The Dodd-
Frank Wall Street Reform and Consumer Protection Act required the CFTC 
to impose strict limits on the amount of oil that Wall Street 
speculators could trade in the energy futures market by January 17, 
2011--over 3\1/2\ years ago.
  Unfortunately, the CFTC has been unable to implement position limits 
due to opposition from Wall Street and a ruling by the DC Circuit 
Court. This is simply unacceptable. Millions and millions of Americans 
who are filling up their gas tanks today are disgusted. They know they 
are being ripped off, and they want us to protect their needs. The time 
is now to provide the American people relief at the gas pump before the 
situation gets even worse.
  I urge my colleagues to cosponsor this legislation.
                                 ______