Obama's plan to rein in oil speculation is a start

Tyson Slocum (center) was one of three panelists called to testify about speculation, gas prices and Dodd-Frank reforms at a U.S. Senate committee hearing in November 2011.

Note: Today, President Barack Obama called for a crackdown on oil speculators by increasing oversight of energy markets, boosting penalties for firms that engage in market manipulation and providing the Commodity Futures Trading Commission with more resources to deter price manipulation.

It’s about time. President Barack Obama finally is offering concrete steps to address the role that market speculation plays in our ever-escalating gas prices. We’re pleased that he is suggesting ways to help lower the price consumers pay at the pump. In fact, Public Citizen in the past has called for many of the things Obama is calling for – such as more resources for regulators and higher penalties for market manipulation.

It’s a good start. But it’s just that – a start. More should be done.

In fact, the president doesn’t need to wait for lawmakers or agencies to act. Right now, the attorney general can take several key steps that would make clear that the government is serious about reining in speculators. For instance, the administration should subpoena major traders and conduct a real investigation into the role that speculators have in increasing gas prices for working Americans.

In addition, we urge the president to add to his congressional to-do list placing a 5 percent limit on the amount of any energy market that a single trader can control (some firms control as much as 50 percent of the market).

Cheap gas is gone. Cracking down on speculators can shave as much as a dollar off the price of gas, but ultimately we need to work toward long-term solutions, such as aggressively investing in renewable fuels as well as the electrification of the transportation sector, and increasing deployment of mass transit.

The president is clearly under pressure to address gas prices. We agree with all his suggestions. We urge him to do more.

For more information about this issue please see Tyson Slocum’s testimony from the above-pictured fall congressional hearing on speculation: https://www.citizen.org/documents/TysonHSGACspeculation.pdf

Tyson Slocum is Public Citizen’s Energy Program director and a frequently called upon expert on oil, speculation and gas prices. Follow him on Twitter @TysonSlocum.