[Congressional Record (Bound Edition), Volume 154 (2008), Part 11]
[Senate]
[Pages 15139-15140]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           ENERGY SPECULATION

  Mr. REID. Mr. President, the bill that was read for the second time 
is a bill I introduced last night and put on the calendar. I attended a 
chairmen's meeting 2 weeks ago today. Much of the discussion at that 
meeting was on gas prices. Much of the discussion on gas prices dealt 
with speculation. The chairs of that meeting asked if I would prepare a 
piece of legislation dealing with speculation.
  That is what this is all about. There are four or five Democratic 
proposals, there are some bipartisan proposals dealing with 
speculation. That is what the bill that I have introduced does. It 
takes some from all of those, what we believe is a good part of these 
bills and brings it to the floor.
  There might be perfection in some things, but legislation is not one 
of them. It is very difficult to get something that is absolutely 
perfect. So this bill is not perfect.
  Is speculation a problem? Of course, it is a problem. Is it the 
problem? No. But it is an issue we must deal with. So I would hope in 
the near future to bring this bill to the floor as a starting point for 
us to have some discussion as it relates to energy.
  In arriving at the point where we introduced this bill, I had a 
meeting last Thursday, where we had people from the financial 
management world, banks, academics. We had, for example, one person who 
is the chief executive officer of United Airlines, who previously was 
chairman of Texaco and vice chairman of Chevron, who has a unique view 
as to what is going on.
  His airline, all airlines in the country, are in deep trouble. He 
sees it from the perspective of someone running a major airline, United 
Airlines, and also having run major oil companies.
  These academics, and you will see the writers, believe that probably 
speculation amounts to about 30 percent of the cost of a gallon of 
gasoline. Now, the bill that has been introduced does a number of 
things. It closes the London loophole, which prevents traders in the 
U.S. oil energy commodities from going overseas to evade regulatory 
requirements in the U.S. exchanges.
  It directs the Commission to work with international regulators to 
develop uniform international reporting standards. It eliminates 
excessive speculation. It requires the Commission to set position 
limits on traders who are not involved in legitimate hedge trading of 
energy commodities, requires large trader reporting, requires large 
traders of energy commodities in over-the-counter markets to file 
reports of their activity with the Commission and directs the 
Commission to step in whenever a major market disruption occurs.
  It makes index traders and swap dealers report. These market 
participants must routinely provide detailed reporting to the 
Commission to ensure that their activity is not adversely impacting 
price in any negative fashion.
  It increases the CFTC enforcement resources. It directs the 
Commission to hire an additional 100 employees to improve enforcement 
transparency. It makes energy markets more transparent by directing the 
Department of Energy to collect information, analyze market data, and 
investigate financial institution investments in natural gas markets.
  I have had a number of informal discussions with the Republican 
leader. I hope this piece of legislation dealing with speculation, 
which we hope will be bipartisan in nature, will be the beginning of 
our having a good discussion on energy prices, before we leave for the 
August recess.

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