Cantwell Continues to Push for Oil Industry Oversight

By:  Josh Feit, publicola at seattle met
Source: SeattleMet

U.S. Sen. Maria Cantwell (D-WA) continues to beat the oil drum. Earlier this month, she took advantage of a hearing on ending oil tax subsidies (a bill that Republicans killed with a filibuster), to talk about her proposal to rein in speculation in oil futures and energy commodity markets.

Today, using a recent Commodity Futures Trading Commission lawsuit against oil traders for creating "artificial spread prices"—essentially, artificially inflating prices by buying up futures and then betting against them to profit—Cantwell called on the CFTC to enact tougher rules on traders that were supposed to be in place (thanks to the Wall Street reform legislation) three months ago.

Calling high gas prices "artificial," Cantwell argues that gas prices are being driven more by speculator manipulations and "shenanigans" than by the traditional forces of supply and demand in which oil companies hedge their bets on the market. That old-fashioned type of hedging is a-okay Cantwell says, but where traditional industry trading used to control about 70 percent of the market, she says, it now only makes up 30 percent—having been replaced by the cryptic deals of pure speculators.

Cantwell, who fought for oversight of Wall Street traders during the financial reform debate (which included specific regulations of oil industry traders), likened the oil market finagling to the infamous tactics of Enron.

We know what manipulation looks like in the Northwest because we saw it with Enron. When the electricity markets were manipulated, everybody told us, 'Oh, it was just a bunch of environmentalists not allowing us to do new facilities. Oh it’s this situation or that situation.' Well, when we finally exposed the audio tapes, we realized that no, it was just pure market manipulation.