WASHINGTON -- U.S. Congressman Bart Stupak (D-Mich.) has introduced revised legislation aimed at closing loopholes that have allowed speculators to manipulate energy markets and artificially inflate prices. Stupak’s Prevent Unfair Manipulation of Prices (PUMP) Act, H.R. 2448, takes a comprehensive approach to addressing the loopholes that allow energy traders to evade federal oversight and for the first time establishes carbon derivatives as a regulated energy commodity."The crises in the housing and financial sectors have shown us what happens when federal regulators are not keeping a close eye on Wall Street," Stupak said. "The Obama Administration’s announcement this week to strictly regulate the derivatives market and put an end to some of this excessive speculation is a welcome step. Congress must take what the Administration has proposed and build on it to create a strong regulatory system that protects American consumers."
Next week the House Energy and Commerce Committee, of which Stupak is a member, will markup energy and climate change legislation, the American Clean Energy and Security Act, which will create an entirely new carbon derivates market which speculators can manipulate. The 2009 PUMP Act would give the Commodity Futures Trading Commission (CFTC) the authority to regulate carbon derivates as an energy commodity.
"The carbon derivatives market should based on a strong regulatory framework," Stupak said. "The finite nature of carbon credits and absence of a physical commodity leave it particularly vulnerable to speculation. That is why it is so important that any cap and trade system we consider includes the strong provisions the PUMP Act provides."
Stupak noted that although energy costs are down substantially from a year ago, the American people, Congress and federal regulators should not be lulled into a false sense of complacency. Addressing excessive energy speculation should be a key part of any new energy policy because another dramatic increase in oil prices, such as the one we saw last spring and summer, would further devastate the already weakened economy.
"We need look no further than today’s oil prices, which have jumped 30 cents in some communities in the past week, to see the effect speculators have on energy prices," Stupak said. "Supply is at a 20-year high, demand is at a 10-year low, yet oil prices are up 70 percent since the beginning of the year. The national average price for gasoline was $1.61 in January; today it is $2.29. This cannot be explained by simple supply and demand. Speculators are driving these prices."
Stupak is a senior member of the House Energy and Commerce Committee and Chairman of its Subcommittee on Oversight and Investigations. In this role, Stupak has led House investigations into the role speculators play in driving up the cost of energy. Documents and testimony related to the Subcommittee’s investigation in the 110th Congress can be found at http://energycommerce.house.gov/index.php?option=com_content&view=article&id=1393&catid=31&Itemid=58 and at http://energycommerce.house.gov/index.php?option=com_content&view=article&id=635&catid=31&Itemid=58.
For more information on Congressman Stupak's issues, visit his Web site.
