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Heating Oil Dealers Return From
Washington
Congress Votes to Close the Enron Loophole as
Hundreds of Energy Retailers Descend on Washington D.C. to Bring Attention to
Energy Issues and Drive Down Prices
May
19, 2008 (Washington D.C.) – Hundreds of local heating oil and motor fuel
retailers and other petroleum marketers are returning from Washington D.C.
after meeting with members of Congress and working to bring down energy
prices. Congress has just passed legislation that will close the so-called
“Enron Loophole,” Guilford said, which will give the federal Commodities
and Futures Trading Commission enhanced authority to regulate the activities
of speculators. The White House has indicated that the President would
potentially veto the Farm Bill, which contains the provision to Close the
Enron Loophole. The House passed the measure with 316 votes and the Senate
with 88, more than enough to override a veto.
“Recent testimony by major oil industry officials have said that nearly half
of the cost of a barrel of oil can be attributed to unbridled, irresponsible
speculation in the energy markets, the CFTC will need to use these new powers
to bring order and responsibility to these markets and reduce prices.”
In meetings with Congresswoman Rosa DeLauro [D-CT, 3rd CD],
as Chair of the Appropriations Committee’s Subcommittee on Agriculture the
Congresswoman expressed strong interest in holding hearings on assuring that
the CFTC has adequate resources to administer their new responsibilities and
that these new responsibilities be pursued quickly and aggressively for the
American people.
“Our economy depends on access to more affordable energy and right now, the
energy commodities trading system is broken,” Gene Guilford, the executive
director of the Independent Connecticut Petroleum Association, said.
“Congress needs to move on several fronts to restore some sanity to
America
’s energy policy because our economy is in recession. We are here to help
members of Congress get the facts from home when they consider our nation’s
energy policy.”
Having passed legislation closing the Enron Loophole, putting the CFTC back in
the business of overseeing all energy trading in domestic markets, next steps
include Congresswoman DeLauro’s efforts to ensure that the CFTC has the
resources it needs to do their job – then consideration of Congressman
Larson’s legislation restricting energy commodity market trading to only
those who can take physical possession of the energy traded in paper contracts
– and further steps to close loopholes involving foreign boards of trade.
Removing hedge funds and investment banks from artificially inflating energy
prices is another step toward restoring order to the energy markets.
Just last week, in one trading day, hedge funds could have purchased $1
million of heating oil contracts that leveraging $100 million worth of heating
oil, and on that day NYMEX heating oil went up nearly 14c a gallon. Selling
that position at the end of the trading day enabled the investor to turn $1
million into $3.6 million.
No one took the actual oil, no one invested in creating jobs or more
energy for
America
, investors made more money for themselves at the expense of consumers and the
heating oil retailers who serve them. This has to be restrained.
The ICPA, along with other members of the Energy Communications Council and
the Petroleum Marketers Association of America, have been meeting with members
of Congress both yesterday and today to make the case for energy market
reform, as well as a number of other issues affecting both energy consumers
and retailers.
In addition to market reform, Guilford said, energy retailers will be working
with Congress to ensure that the Low Income Home Energy Assistance Program is
funded to at least $5 billion for the coming fiscal year and to reject
President Bush’s proposed cut in that critical program, reduce the hidden
fees consumers pay to credit card companies, and reform cumbersome regulations
that increase the prices consumers pay at the pump.
“The energy markets are being driven by speculators and profiteers who are
using loopholes in the existing law do drive the price of oil and other
commodities to historic highs,”
Guilford
said. “Congress needs to step in and restore some sanity to the market
because our economy has been driven to the brink of disaster by these
speculators, who are profiting at the expense of American families and
businesses.”
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