The spike in gasoline costs is killing any hope of an economic recovery – locally, statewide and nationally.
Motorists are angry. They are angry that they are mere pawns in the oil companies’ quest to increase profits at their expense.
They are angry that speculators on Wall Street are creating wild swings in the price of gasoline – increases that have very little to do with the supply of gas, but everything to do with manipulating prices based on unrest in the Middle East.
They are angry but feel powerless to do anything about the situation. Their anger should be directed at the five-member Commodity Futures Trading Commission, which is dragging its feet on using federal law to cap the value of oil futures any one investor can control.
Their anger also should be directed at Congress, which continues to provide multibillion-dollar tax subsidies enjoyed by the major oil companies at a time when Exxon Mobil Corp., Chevron Corp. and ConocoPhillips are reporting combined first-quarter earnings of $18.2 billion. That’s a 40 percent increase from a year ago and just short of the $20.2 billion they earned in the first three months of 2008.
Some of the blame, too, should be directed at President Barack Obama, who has appeared more of a spectator than player in the quest to stop the madness.
Motorists are left to hope that their level of anger will finally get the attention of national leaders. And there seems to be some progress on that front.
Obama recently appointed a task force to look into manipulation of oil and gas prices. He and Attorney General Eric Holder created the Financial Fraud Enforcement Task Force Working Group to focus on fraud in the energy markets, asking the working group to monitor oil and gas markets for violations that harm consumers.
And Sen. Maria Cantwell, a Democrat from Washington state, and her colleagues in the U.S. Senate are raising a real ruckus about federal regulators who seem to be asleep at the helm.
In 2005, Cantwell first introduced legislation that would create a federal ban on oil market manipulation to prevent Enron-style schemes from happening to the oil industry.
Legislation banning manipulation in the oil and petroleum markets finally became law in the 2007 Energy Bill. The Federal Trade Commission has the authority to levy civil penalties of up to $1 million per day for violations.
It took the FTC more than two years just to adopt rules so it could start enforcing the law. Now Cantwell has called on the FTC to investigate any links between rising gas prices and a sharp increase in wholesale oil markets.
Cantwell also is focused on the Commodity Futures Trading Commission, which she said is still more than three months late in enacting rules that would rein in speculation. “Speculators have flooded the oil markets, with speculation up 64 percent since 2008,” Cantwell said. “Americans are hurting at the pump, and the CFTC needs to act now.”
CFTC Commissioner Bart Chilton said excessive oil speculation costs drivers between $8 and $16 per tank, depending on the kind of car they drive.
Meanwhile, House Speaker John Boehner, when cornered by a television reporter, said that Congress should “take a look at” repealing the multibillion-dollar tax subsidies enjoyed by the major oil companies.
Of course Congress should ask. Taxpayer subsidies at a time of billions of dollars in first-quarter profits is an outrage.
Boehner, the most powerful Republican in Washington, must side with Democrats who have repeatedly attempted to block oil company subsidies.
If Boehner and his Republican colleagues finally see the light, if the president’s fraud group gets results and if the FTC and Commodity Futures Trading Commission get serious about reining in speculators with hefty fines, maybe, just maybe, we won’t see $5-a-gallon gasoline by summer.
Dare we hope?