There’s been a lot of hype surrounding the rising price of gas lately. All of the sudden, the media and now President Barack Obama seem to be on the verge of of catching onto something Public Citizen has been talking about for years — speculation. Remember the home mortgage slice-and-dice gamblers that led to the global financial meltdown? Well, the same kind of tricksters exist in the energy markets as well.
No one knows the tricks of these tricksters better than Tyson Slocum, Public Citizen’s energy program director. Last night, Slocum was the expert to turn to following President Obama’s announcement of a new gas prices task force. Slocum made appearances on three of the leading prime-time cable news shows, among countless radio interviews.
While Slocum feels Obama’s expressed interest in rooting out fraud and manipulation of the oil markets is a good start, he doesn’t think it adequately addresses the problem of high gas prices. According to Slocum,
The problem is not necessarily that higher gas prices at the pump are being driven by fraudulent or manipulative behavior by traders and speculators, but rather, they are being driven by excessive speculation that is perfectly legal.
Consider this: Goldman Sachs recently estimated that speculation accounts for roughly $27 of the current price of crude oil. Since then, prices have gone up by $5 a barrel (Reuters), so now speculation is estimated to account for more than $30 a barrel – or 70 cents a gallon, according to Public Citizen analysis.
“The Dodd-Frank Wall Street Reform and Consumer Protection Act set firm position limits that would help curb speculation, but the Commodity Futures Trading Commission (CFTC) has delayed their implementation.”
He continues that, “While there have been cases of energy companies committing fraud – think Enron, Amaranth Advisors and, most recently, the $303 million penalty against BP for manipulating U.S. energy prices – we believe the real culprit now is not illegal fraud and manipulation, but legal price-gouging courtesy of excessive speculation.”
Many have aptly called Public Citizen, “the people’s lobbyists.” Financial speculation is wrong because main street is feeling pain at the pump so that Wall Street can profit. Slocum’s concern about consumer protection though doesn’t hold him back from fighting other important battles that are also about the best interest of every day Americans. Specifically, today, on Earth Day, the guy who sported a suit and tie to talk gas prices the night before bicycled to an Earth Day clean-up event with Public Citizen energy advocacy director Allison Fisher. The most hilarious, and arguably best, part of it all — he dictated us this press statement while en route.
Gotta love how we roll here.