[Congressional Record (Bound Edition), Volume 152 (2006), Part 10]
[House]
[Pages 14074-14075]
[From the U.S. 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 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

[[Page 14075]]

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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