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Anti-speculation bill blocked in House

July 30, 2008
Press Release

Washington, D.C. - Republicans in the U.S. House blocked anti-oil speculation legislation today.

Rep. Peter Welch (VT-AL) began advocating for legislation to crack down on price speculation in the energy markets last fall after hearing from local fuel dealers that an unregulated energy market, created by the Enron Loophole, was artificially inflating fuel prices.

Vermont fuel dealers estimate speculation will inflate the average Vermonter's winter heating bill by over $2,000.

"Rooting out oil speculation from energy markets will reduce the price on fuel overnight. Vermonters are struggling to fill their gas tanks and heat their homes this winter. They need relief and they need it now," said Welch. "I am discouraged that the same members of Congress who gave the green light to speculation with the Enron Loophole in 2002, today blocked a majority of the House from curbing speculation to lower fuel prices."

Welch added, "They've chosen energy speculators on Wall Street over people on Main Street."

"Last November, before it was on the radar of most people, Congressman Welch targeted the need to close the Enron Loophole and end the speculation game driving up fuel prices. We appreciate his persistent advocacy on this issue," said Sean Cota, president, Cota & Cota, Inc. in Bellows Falls and chairman of the New England Fuels Institute.

Cota first raised the issue of speculation with Welch at a Congress in Your Community in Bellows Falls last fall. Welch followed up with legislation on the issue.

H.R. 6604, the Commodity Markets Transparency and Accountability Act of 2008, sought to bring transparency to commodity and futures markets and toughen position limits on oil and other futures markets as a way to prevent potential price distortions caused by excessive speculative trading. The legislation also extends Commodity Futures Trading Commission (CFTC) oversight to previously exempt over-the-counter markets, and it calls for new full-time CFTC staff to improve enforcement, to prevent manipulation, and to prosecute fraud.

The bill failed to get the two-thirds majority vote to pass by a suspension of the rules.

"We are going to keep fighting until Vermonters and all Americans get relief from punishing fuel prices," added Welch.

Last November, Welch authored the Close the Enron Loophole Act, which grants the CFTC additional authority to oversee energy markets deregulated in 2000 at the request of Enron and other large energy companies. A version of this bill was included in the Farm Bill, which became law upon Congress overriding the President's veto.

Earlier this summer, the House passed the Energy Markets Act, H.R. 6377, to direct the Commodity Futures Trading Commission (CFTC) to use its existing emergency authority to investigate excessive speculation on energy prices and take steps necessary to remove speculation in the market. The bill passed by a vote of 402-19. Welch helped to draft the bill and was an original cosponsor.