WASHINGTON – U.S. Congressman Bart Stupak (D-Menominee) testified today before the House Agriculture Committee on the need to curb excessive speculation on the energy markets, which has been identified as a leading factor in record high prices for gasoline and diesel.  Stupak urged the committee to pass H.R. 6330, the Prevent Unfair Manipulation of Prices (PUMP) Act, comprehensive legislation he has introduced to close the loopholes allowing speculators to artificially inflate energy prices.

“I urge the members of this committee and my colleagues in the House to look at the evidence for themselves,” Stupak said in his testimony before the committee.  “We can either continue with the status quo and allow excessive energy speculation to inflate energy prices beyond underlying supply and demand fundamentals.  Or we can stand up for our constituents, who facing high prices at the pump, and our nation’s businesses, who are struggling to cope with a weak economy and high production costs due to energy prices.”

Stupak, who chairs the House Energy and Commerce Subcommittee on Oversight and Investigations, has been investigating energy speculation for three years.  He has held two hearings in the past six months on the topic and just last month held a hearing in which a variety of experts testified oil prices could be reduced by as much as 50 percent within 30 days if the PUMP Act was enacted. 

Stupak’s legislation has the support of more than 60 bipartisan cosponsors in the House and has been introduced in the U.S. Senate by Senator Maria Cantwell (D-Wash.).  A coalition of more than a dozen agriculture, airline, labor and industry groups has endorsed Stupak’s legislation, including the National Farmers Union, the Air Transport Association, the International Brotherhood of Teamsters and the Industrial Energy Consumers of America.

“All sectors of our economy have been hit hard by rising energy costs and those costs are passed along to American consumers in the form of higher prices for gasoline, food, transportation and manufactured goods,” Stupak said.

Growing bipartisan support is building in Congress for further action to address energy speculation.  Stupak presented data compiled over the course of his investigation into energy speculation to the members of the Agriculture Committee today.  This information shows the money flooding into the energy markets far exceeds fundamental factors, such as supply and demand, causing exorbitant price increases for gasoline, diesel, home heating oil and other energy products.  In January 2000, speculators accounted for 37 percent of energy trading, a figure that had grown to 71 percent by April 2008.

“This excessive speculation is a significant factor in the price Americans are paying for gasoline, diesel and home heating oil,” Stupak said.  “Even the executives of the major U.S. oil companies recognize this.”  Stupak noted that top executives of ConocoPhillips, Shell and Chevron testified before Congress earlier this year that oil prices were being inflated beyond what supply and demand would dictate.

The PUMP Act would close what remains of the “Enron loophole” as well as loopholes for foreign boards of trade and swaps.  The bill also addresses bilateral trades and bona fide hedging exemptions.  House leadership had indicated they expect to hold a vote on energy speculation legislation before August.  Of the 31 proposals to address energy speculation introduced in Congress, Stupak’s legislation has been identified by outside experts and his colleagues as the most comprehensive. 

“Addressing high energy costs is a critical issue that must be the top priority for Congress,” Stupak said.  “Now is the time for Congress to take up my comprehensive legislation and close off the loopholes that are allowing speculators to manipulate the markets.”