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Inslee, Cantwell host roundtable on gas prices as July Fourth holiday approaches

July 1, 2008

Just days before the July Fourth holiday weekend, U.S. Rep. Jay Inslee (D-Wash.) and U.S. Sen. Maria Cantwell (D-Wash.) held a roundtable discussion with area business leaders and consumer advocates at Sea-Tac International Airport to discuss the local impact of record gas prices and actions Congress is taking to crack down on speculation in oil markets.  Today, the average price of regular gasoline reached $4.38 in the Seattle area, according to AAA.

"At the beginning of the decade, we saw with Enron what happens when markets operate in the dark,” said Inslee, a member of the House Energy and Commerce Committee.  “Oil markets now are operating in the dark and it's time to shed some light on them."
 
Cantwell, a member of the Senate Commerce, Science and Transportation Committee, added, “Unfortunately, this Fourth of July, consumers won't get to take a holiday from record high gas prices. 

“Gas prices are affecting all facets of life for American consumers and businesses.  They can’t afford to wait another day, week, or month for their government to act and defend them from out of control prices, and burst the oil price bubble.  When we return to the other Washington next week, it's my hope that we can put partisan politics aside and find a solution to help bring relief at the pump for millions of Americans.”

Roundtable participants included Dana Debel, director of government and media relations for Northwest Airlines; Janet Ray, corporate communications managing director for AAA Washington; Linda Nageotte, Food Lifeline president and chief executive officer; Michael Gonzales, Teamsters Local 174 business agent; and, Tim Thompson, president of Thompson Smitch Consulting Group, which represents U.S. Oil and Refining in Tacoma, Wash.

“For the first time this decade, AAA estimates a decline in the number of Americans traveling during the Fourth of July holiday travel period,” roundtable participant Ray said. “AAA supports efforts to make the [oil] trading process more transparent to regulators and believes the markets should be more responsive to the needs of those who purchase contracts for eventual physical delivery than to those who do so merely in hopes of a financial windfall.”

Another participant, Debel added, "The typical supply and demand fundamentals are absent in today's oil markets, as demand last year on a typical day was 87 million barrels a day, while over 1.2 billion barrels of oil were traded.  This excessive speculation has been a leading factor in causing the airline industry's fuel costs to double over the past 12 months.  We are asking Congress to increase disclosure and transparency and to close commodities trading loopholes and strengthen the [Commodity Futures Trading Commission] CFTC's authority to oversee the market, both in the U.S. and abroad, as a means of returning oil prices to more rational rates."

In April, Inslee and Cantwell called for the creation of a new Department of Justice (DOJ) task force to examine fraud and manipulation of oil and gas markets.  Since then, Inslee has cosponsored the Prevent Unfair Manipulation of Prices (PUMP) Act, which would eliminate loopholes – like the Enron loophole – that allow energy traders to amass excessive profits while inflating the price of oil for consumers, by trading on foreign markets and entering into other deals that currently escape federal oversight.  He also voted for the Energy Markets Emergency Act in the House that would direct the CFTC to use its full authority to stop excessive speculation and other practices that are distorting the energy market. 

For months, Cantwell has been working to bring more transparency and oversight over the oil and gas markets.  In addition to calling for the DOJ task force with Inslee, she has repeatedly called on federal agencies including the Federal Trade Commission and the CFTC to use their existing authority to conduct oversight over the oil and gas markets.  Earlier this month, Cantwell chaired a landmark Senate Commerce Committee hearing which served to highlight many of the oil futures market loopholes.