As Gas Goes Up, Sanders Says Regulate or Resign

[ProSense]

As Gas Goes Up, Sanders Says Regulate or Resign

With Wall Street speculators driving up oil and gas prices to near record highs, Sen. Bernie Sanders on Thursday urged President Obama to ask for the immediate resignation of federal regulators who won't enforce a new law to stop excessive speculation in oil markets. Regular unleaded gasoline averaged $3.90 a gallon in Vermont on Thursday, a penny more than the national average. At the same time, big oil companies posted record profits. ExxonMobil's $10.7 billion first-quarter profit was 69 percent greater than one year ago. "The skyrocketing cost of gasoline is causing severe economic pain to millions of Americans who have already suffered through the worst economic crisis since the Great Depression," Sanders said in a letter to Obama. "In Vermont, where it is not uncommon for people to commute 100 miles to work and back five days a week, the increased price of gas is taking a serious bite out of the paychecks of middle class families, many of whom are already working longer hours for lower wages."

With that backdrop, Sanders asked the president to intercede with the Commodity Futures Trading Commission, the federal regulatory body that has failed to rein in the rampant speculation artificially driving up oil prices.

The Wall Street reform law enacted last year required the commission to impose so-called position limits, which would restrict the amount of oil that speculators could trade in the energy futures market. The law called for the tough new regulations to take effect by Jan. 22. The commission balked. Now, three months later, the price of gasoline has gone up 80-cents a gallon because of the commission's hands-off approach to the markets it is supposed to regulate.

Only two of the five sitting commissioners support strong limits that the new Wall Street law envisioned. It takes three commissioners to adopt a new rule. The president, Sanders said, should insist that the law be enforced and demand the immediate resignation of commissioners who refuse to do their job.

"I urge you to make it clear to the CFTC that they must obey the law and establish strong oil speculation limits as soon as possible," the senator wrote. "I would also urge you to ask for the immediate resignation of any CFTC commissioner who refuses to obey the law and nominate someone else who will."

[demosincebirth]

1. I didn't know you could regulate Oil speculators Why in the hell haven't they done it in the past?.

[elleng]

3. They have, in the past. Gramm games resulted in removing

'limits,' and they can be restored, 'required the commission to impose so-called position limits.'

[krispos42]

9. I believe it used to be that you could only buy oil if you had a reason to.

Such as, owning an oil refinery or an oil pipeline or something.

I believe it was changed so that anybody with a couple of bucks to rub together can buy oil now.

[Ikonoklast]

16. Unless you can prove capability to take delivery of any commodity

you should not be aqllowed to speculate in that market.


You aren't hedging against supply or price, you are only manipulating or gambling if you cannot take delivery.

[krispos42]

26. Sounds like an excellent plan to me.

I wonder how much lower grain prices would be if this was implemented?



Heh... imagine the first time a tractor-trailer full of loose oats rolled up to one of the estates in Greenwich and dumped a huge mound of grain on the front lawn!

[PVnRT]

21. In theory, you can regulate anything you want

It's that pesky voting thing that gets in the way, especially when three of those votes are probably being bought by oil company money.

[PearliePoo2]

2. sigh........

The price of gas is hurting me big time ($4.75 premium).
Does ANYONE think the price will ever go down????

[Enrique]

4. Bernie putting this in Obama's lap

the letter is very strong. Bernie repeats "Wall Street" to good effect. :thumbsup:

[ProSense]

5. "the letter is very strong"

Yeah, and it doesn't hurt that Wall Street reform was signed into law.

[Armstead]

6. Only matters if it is actually used.

Let's see if President Obama takes up Bernie's challenge. It's a chance for him to show where he stands.

[ProSense]

7. True, and

the law never would have existed if the bill hadn't passed.

Kudos to Senator Sanders for supporting Wall Street reform and for pressing the issue with the President.

[Armstead]

10. I'll agree with you on that

Surprised?

[Historic NY]

8. I agree the Commodities Regulators are doing diddly squat ...

makes you wonder whose pocket they are in.

[Tarheel_Dem]

11. According to the panel on Diane Rehm's show this a.m., speculation

is only a very minor part of this problem. They stated that China's exploding demand for oil, and the troubles in the ME are also playing a part. But, kudos to Bernie if he can make a difference. Hasn't the president already appointed a commission to take a look at speculation? I'm pretty sure I read that here. :shrug:

[DCKit]

12. Why appoint a panel if the CFTC is supposed to be all over this?

It's politics, and we're getting screwn while they dither and dally to allow oil companies, commodity traders, banksters and Wall St. to rake it in.

[Historic NY]

15. Ah, BS......the supply is being met.

Crude oil prices rose on Wednesday above $112 a barrel despite that a report from the Department of Energy showed crude oil inventories increased above expectations,


The EIA report showed on Wednesday that crude oil inventories increased in the week ending April 15, by 6.2 million barrels, compared with median estimates of a 1.7 million barrels increase; nevertheless, the drop in oil prices was limited after gasoline inventories declined more than estimates.

http://www.benzinga.com/11/04/1038693/crude-oil-daily-fundamental-analysis-for-april-28-2011

lots of stats here.
http://ir.eia.gov/wpsr/overview.pdf

[LiberalFighter]

20. Ratigan had some hedge guy on explaining that speculators were not the problem.

My question would be on the hedge guy... whether he had a conflict of interest. And I would pose the same question to that panel on Rehm's show.

[Vinca]

13. If only the Senate had 99 more Bernies.

[The Wizard]

14. Drive the speculators into

the depths of poverty, nationalize oil. It's a good first step in stabilizing the economy, and minimizing social upheaval.

[OwnedByFerrets]

17. Go Bernie!!!! GO GO GO!!!

[ProSense]

18. Attorney General Holder Announces Formation of Oil and Gas Price Fraud Working Group...

Attorney General Holder Announces Formation of Oil and Gas Price Fraud Working Group to Focus on Energy Markets

WASHINGTON – Attorney General Eric Holder today announced the formation of a Financial Fraud Enforcement Task Force Working Group to focus specifically on fraud in the energy markets. The Oil and Gas Price Fraud Working Group will monitor oil and gas markets for potential violations of criminal or civil laws to safeguard against unlawful consumer harm.

The working group will include representatives from the Department of Justice, the National Association of Attorneys General, the Commodity Futures Trading Commission, the Federal Trade Commission, the Department of the Treasury, the Federal Reserve Board, the Securities and Exchange Commission, as well as the Departments of Agriculture and Energy.

“Rapidly rising gasoline prices are pinching the pockets of consumers across the country,” said Attorney General Holder. “We will be vigilant in monitoring the oil and gas markets for any wrongdoing so that consumers can be confident they are not paying higher prices as a result of illegal activity. If illegal conduct is responsible for increasing gas prices, state and federal authorities should take swift action.”

In March 2011, President Obama asked the Attorney General to work with federal and state agencies to monitor oil and gas markets for potential wrongdoing. In response to the President’s call for action, Department of Justice leadership consulted with federal agencies and state attorneys general and discussed pending inquiries in some states, the most effective legal tools and areas that require additional exploration. As a result of this examination and to further the central mission of the Financial Fraud Enforcement Task Force, the Attorney General formed the Oil and Gas Price Fraud Working Group.

The Oil and Gas Price Fraud Working Group will explore whether there is any evidence of manipulation of oil and gas prices, collusion, fraud, or misrepresentations at the retail or wholesale levels that violates state or federal laws and harms consumers or the federal government as a purchaser of oil and gas. The Working Group will also evaluate developments in commodities markets and examine investor practices, supply and demand factors and the role of speculators and index traders in oil futures markets.

The Financial Fraud Enforcement Task Force was established by President Obama to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes and other laws prohibiting financial fraud. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement agencies who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

[Broderick]

19. Several sides to this

quit devaluing the dollar in world markets in my opinion. they are mutually exclusive. Commodity prices go up when the dollar goes down.

[ProSense]

22. Robert Reich:The Oil Company Gusher

The Oil Company Gusher

<...>

Exxon-Mobil’s Vice President asks that we look past the “inevitable headlines” and remember the company’s investments in renewable energy.

<...>

In point of fact, no oil company is investing much in renewables — precisely because they’ve got such money gusher going from oil. Those other oil companies also had a banner first quarter, compounding the industry’s embarrassment about its $4 billion a year welfare check.

<...>

Republicans who have been defending oil’s tax subsidy are also finding themselves in an awkward position. John Boehner temporarily sounded as if he was backing off – until the right-wing-nuts in the GOP began fulminating that the elimination of any special tax windfall is to their minds a tax increase (which means, in effect ,the GOP must now support all tax-subsidized corporate welfare).

Boehner is now trying to pivot off the flip-flop by reverting to the trusty old “drill, drill, drill” for opening more of country to oil drilling and exploration. “If we began to allow more permits for oil and gas production, it would send a signal to the market that America’s serious about moving toward energy independence,” he says.

This argument is as nonsensical now as it was when we last faced $4-a-gallon gas. To repeat: It’s a global oil market. Even if 3 million additional barrels a day could be extruded from lands and seabeds of the United States (the most optimistic figure, after all exploration is done), that sum is tiny compared to 86 million barrels now produced around the world. In other words, even under the best circumstances, the price to American consumers would hardly budge.

more

[Avant Guardian]

23. Why does it take Bernie Sanders to expose this shit?

Why isn't shit like this being taken care of automatically behind the scenes?

[totodeinhere]

24. This issue is more complicated than just blaming speculators. I know

it's a popular feel good thing to blame those evil speculators. But speculating in oil futures can only go so far. Gas is perishable. It will spoil after a while, so speculators have to dump it back into the market at some point, unlike a commodity like gold which is not perishable and can be held indefinitely.

[frazzled]

25. Review your history on this issue

First, recall that it was Obama himself (then a Senator) who introduced a plan to combat oil futures speculation. Senate republicans quashed a bill to regulate oil speculation in that same year.

http://www.politicususa.com/en/Obama-Oil-Futures

Next recall that it was the Dodd-Frank financial regulation bill promoted and signed by President Obama that is the ONLY reason the CFTC was finally given the ability to regulate this speculation. So why can't they go ahead and regulate? Return to 2008 when the Republicans quashed the bill:

Thanks to the Dodd-Frank financial reform law that was signed by President Obama in July 2010, the CFTC is allowed to set “position limits” on such speculation, but the final regulations won’t be implemented until early 2012.

But the CFTC could have gotten started on its rulemaking two years earlier were it not for Senate Republicans. In July 2008, the House overwhelmingly passed a bill directing the CFTC to limit speculation in the oil market. However, Senate Republicansfilibustered the bill in the Senate, preventing it from ever coming up for a final vote:

Senate Republicans on Friday blocked a vote on legislation to rein in speculation in the energy markets, instead calling for energy votes that would expand domestic petroleum production and more nuclear power development. Democrats, in a 50-43 vote, failed to gain the 60 votes needed to bring the speculation bill forward for consideration on the Senate floor.

...
Having the CFTC begin in July 2008 the work that it began last July would have brought limits on speculation online this summer, instead of next, if the CFTC were working on the same timetable it is now. Technically, Dodd-Frank called for speculation limits to be in place three months ago, but the CFTC missed its deadline, in part due to conservative opposition to the limits.

http://www.hayscountydemocrats.org/flashback-in-july-2008-senate-republicans-blocked-bill-limiting-oil-speculation/