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Klobuchar Pushes for Energy Price Relief Through Crackdown on Market Speculation

Cosponsors legislation on oil markets and energy independence; vows to keep fighting for consumers

June 10, 2008

Washington, D.C. – U.S. Senator Amy Klobuchar voted today for legislation she cosponsored that would bring consumers relief at the gas pump by cracking down on speculation in world energy markets, while also developing long-term renewable energy sources to reduce America’s dependence on foreign oil.

“People all across Minnesota are feeling the squeeze of unprecedented gas prices,’’ Klobuchar said. “Meanwhile, the experts tell us that energy markets have become a gambling hall where rampant speculation is driving up the price of energy. At times like this, consumers need their government to make sure that markets are fair, honest and transparent.’’

The market reform provisions were contained in the Consumer First Energy Act of 2008. The bill won the support of a majority of Senators voting today, 50-44, but procedural rules required 60 votes to move the legislation forward.

“Consumers need action in Washington to bring them relief from the energy squeeze,’’ Klobuchar said. “I will keep working until we get strong legislation to ensure that federal regulators are exercising real vigilance to protect consumers against speculation and market manipulation.’’

In April Klobuchar wrote U.S. Attorney General Michael Mukasey, urging him to create an Oil and Gas Market Fraud Task Force to investigate the causes of skyrocketing petroleum prices. In the wake of the Enron scandal, the Department of Justice established a Corporate Fraud Task Force, which produced more than 1,000 convictions by aggressively prosecuting corporate fraud. Klobuchar and Senator Maria Cantwell (D-WA) proposed that the Corporate Fraud Task Force be expanded to include oil and gas markets specifically.

Klobuchar also has written the Administration asking that the Commodity Futures Trading Commission intensify its supervision of energy market trading, including trades placed in foreign exchanges to avoid U.S. regulation, and increase the amount of cash that margin traders must put down on speculative energy investments. The Commission announced last month that it has opened an investigation into possible energy market manipulation.

The Consumer First Energy Act would have amended the Commodity Exchange Act to impose new reporting requirements on energy traders and prevent traders of U.S. crude oil from routing transactions through offshore markets to evade restrictions on speculative trading. The bill also would have required the Commodity Futures Trading Commission to substantially increase the margin requirement on crude-oil futures trades as a way of limiting speculative trading.

Another provision of the bill would have amended the Sherman Antitrust Act to give the U.S. Attorney General authority to bring legal action against foreign governments, such as members of OPEC, who engage in collusion to raise prices. And it would have given the federal government authority to impose civil and criminal penalties for gasoline price-gouging under certain circumstances.

At a time of record oil company profits, the bill also would have created a windfall profits tax on the oil and gas industry. But that provision would have encouraged the development of homegrown renewable energy by specifically exempting profits that are reinvested in clean, renewable energy sources such as wind power and solar energy.


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