Congresswoman Jackie Speier (D-San Francisco/San Mateo) called for a crackdown on Wall Street speculators during a Congressional Populist Caucus press conference on rising gas prices.
Gas prices have been steadily rising over the last two and a half years, reaching their national peak about two weeks ago. This has been a drain on Americans already struggling with high unemployment and a slow economic recovery. “My constituents are paying upwards of fifty to eighty dollars every time they fill up their tank,” Speier said. “Supply is up, demand is down, yet gas prices continue to rise, a clear sign of speculation. We need to provide meaningful relief today.”
The Republican approach is additional drilling. But according to the nonpartisan Energy Information Administration, more drilling would lower gas prices by only 3 to 5 cents per gallon in 2030. Speier emphasized the need to focus on Wall Street speculators. Speculation causes inflation of the price of oil through speculative investment, leading in turn to higher gas prices.
“Even Goldman Sachs estimates that speculation is jacking up the price of oil today by as much as $27 a barrel,” Speier said. “It is time to prosecute those who are profiting off of consumers’ pain at the pump.”
The Dodd-Frank Wall Street Reform and Consumer Protection Act gave the Commodity Futures Trade Commission (CFTC) additional authority to crack down on oil speculation. But Republicans have attempted to starve the agency of funding. This week, the CFTC filed a civil suit against a number of speculators for committing fraud in the oil futures market in 2008. Speier said we must provide the CFTC with additional resources so it can continue to prosecute bad actors. Recently, Speier wrote a letter, signed by 54 of her colleagues, urging the Department of Justice and the CFTC to fully investigate speculation activities and set specific limits on speculation in the energy market.
“It is time to end the speculation free-for-all on Wall Street and start a real effort to help Americans at the pump,” Speier concluded.