Cantwell takes aim at sky-high gas prices
Senator faults an obscure agency for failing to implement reforms
Wednesday, April 20, 2011
U.S. Sen. Maria Cantwell on Wednesday brought together a few people to talk about the impact of rising gas prices. They met at the Shell station on Vancouver Mall Drive, where the price of a gallon of regular was $3.899 — for the moment.
Todd Shaw, general manager of Vancouver Oil Co., said the wild fluctuations he’s seen over the past couple of weeks mean his 3,000 customers “don’t have any idea what the price is going to be or how to budget for it” from day to day.
Mike Leboki, co-owner of Taylor Transport Inc., has been struggling the past 2½ years just to stay in business, meanwhile cutting his work force from 125 to 60 employees. “We finally got things rolling again” as the construction business began to pick up recently, he said. “But in February, gas was up 75 cents a gallon and all our profits went right into the tank.” His 50 dump trucks burn 2,500 to 3,000 gallons of gasoline a day.
Diane McWithey, executive director of the social service agency Share, is feeling the pinch of rising gas prices, too. Her agency’s Backpack Program provides food to 1,200 children at 48 schools throughout Clark County to help them get through lean weekends at home. But the volunteer corps that delivers those food bags has shrunk, she said — due to of the cost of gas.
“Eight hundred children aren’t going to get food because I can’t get it to them,” she said.
The rising cost of gas is hurting Washington’s economic recovery, Cantwell said. “It’s hitting truckers, it’s hitting transit. These prices are slowing down job growth and forcing families to survive on less.”
But it’s not a shortage of oil on the world market that’s causing the volatility, she said. “In reality, there is enough supply to meet demand.”
Instead, she said, the problem is the failure of a somewhat obscure agency to implement the Wall Street reforms Congress enacted last year.
Specifically, Cantwell said, the five-member Commodity Futures Trading Commission is dragging its feet on using a tool Congress gave it to curb speculation and temper wild price swings by capping the value of oil futures any one investor can control.
“Vancouver drivers are paying at the pump for excessive oil speculation, while federal regulators have blown off deadlines and failed to act,” Cantwell declared. “In last year’s Wall Street reform law, we gave the financial cops the tools they need to rein in rampant oil speculation and protect consumers. Today, I’m demanding that they use those tools to help relieve the burden of gas prices on families and small businesses in Vancouver and across the country.”
In January, Cantwell, D-Washington, who sits on both the Senate Energy and Senate Finance committees, joined seven other senators in demanding that the commission “quickly and aggressively” implement limits on speculation by investors in more than two dozen commodity markets, spanning energy, metals and agriculture, in order to curb rising food and energy costs.
“The growing role of hedge funds, financial traders, and long-term passive investors in energy and other commodity markets has had devastating consequences for the average American,” the senators said their letter.
In March, Cantwell and 17 other senators urged the commission’s chairman, Gary Gensler, “to restore integrity to our energy markets by exercising the CFTC’s authority to require higher margin levels for speculative oil futures contracts.”
They cited reports from commodity experts who say oil speculators are driving up the cost of oil by buying up oil futures on a gamble that political unrest in the Middle East and North Africa will seriously disrupt oil supplies at some future date.
But the commission has failed to meet a deadline for complying with the Wall Street reform bill by enacting new rules to dampen harmful speculation, Cantwell said.
On Tuesday, President Barack Obama joined the chorus, declaring that there is enough oil in world markets to meet demand and blaming speculators for driving gasoline prices higher and straining the pocketbooks of American consumers.
“I know that if you’ve got a limited budget and you just watch that hard-earned money going away to oil companies that will once again probably make record profits this quarter, it’s pretty frustrating,” the president said.
Meanwhile, the average price of a gallon of gasoline in the United States hit $3.84 last week, the highest level since August 2008. Oil prices have soared above $100 a barrel recently. The price for a gallon of regular gasoline in the Vancouver area has risen by more than 15 cents in just the past month and by 75 cents in the past year, Cantwell said.
Gas prices have climbed by nearly a dollar a gallon in the Portland metro area over the past year, according to AAA Oregon. “Unrest in the Middle East and Northern Africa continue to fuel higher crude and gas prices, as well as the annual change from winter-blends to the more expensive summer-blends of gasoline,” spokeswoman Marie Dodds said Wednesday.