CONGRESSMAN LARSON PROPOSES LEGISLATION TO LOWER ENERGY PRICES
FOR IMMEDIATE RELEASE: March 31, 2008
Contact: EmilyBarocas /202-225-7295/202-593-1377
Congressman Larson Proposes Legislation to Lower Energy Prices
Hartford, CT -- Congressman John B. Larson (CT-01), Vice Chairman of the DemocraticCaucus, announced a major legislative initiative this morning that will takethe speculation out of the energy futures markets. His proposal will drastically change themarkets by requiring that investors in the market be able to take delivery of thepetroleum product in which they are investing. This will eliminate the speculators from the market who are driving upthe price of oil and natural gas.
The price that average Americans pay at the pump or pay to heattheir homes no longer represents true supply and demand. Prices continue to rise for energy products,reaching all time highs week after week. But, the demand for the oil and gas is not increasing. These costs arestretching wallets to the brink and making it hard for people to make endsmeets.
While many factors impact the price of oil, analysts blame speculationfor a much of the increase we've seen recently. As other investments perform poorly, investors are putting their moneyinto more stable markets - namely the energy futures markets where pricescontinue to go up. Investors outbid eachother for futures contracts and consumers end up paying the price.
Even the CEO of Exxon Mobil said in 2005, "We are in themode where fundamentals of supply and demand really don't drive price." This type of artificial distortion of the oilmarkets, or any market, threatens the very underpinnings of our free-marketsystem.
Congressman Larson said, "Too many Americans are suffering trying to pay energy bills, put foodon the table and pay for their prescriptions. It is time to fight for the little guy. It is time to restore the concept of supply and demand to oil prices. I believe this legislation will accomplishthat."
At the announcement today, local Connecticut petroleum dealers explainedfirsthand the impact speculators are having on the price of oil. John Mitchell of Mitchell Oil in South Windsor, Connecticut,told the story of one of his customers, an elderly man, who came by hisoffice. The customer told Mitchell hewas in a bind. If he filled up his tankwith home heating oil and kept his house warm all winter, it would completelywipe out his Social Security check. Hewould not be able to pay for his food, prescription drugs and other necessities.This is not a choice this man or anyone else in our country should have tomake.