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Yarmuth to President: "Stop Excessive Speculation" in Oil Market

Congressman John Yarmuth is calling on President Bush to regulate oil speculation, which experts estimate is inflating oil prices by as much as 50 percent.  Since Congress enacted the "Enron Loophole" in 2000, speculation on oil futures has increased dramatically.

Below is a letter to President Bush to Congressman Yarmuth, urging him to excercise his emergency authority.


July 2, 2008
The Honorable George W. Bush
President of the United States
1600 Pennsylvania Avenue NW
The White House
Washington, DC 20500

Dear Mr. President:

Across the nation, American families are struggling to afford high energy costs.  In my hometown of Louisville, people are trying to make ends meet while paying more than four dollars and twenty cents per gallon of gasoline.  High oil prices are impacting every sector of our economy – from transportation, to manufacturing, to agriculture – and every sized business – from multi-million dollar companies to family-owned shops.  At every turn, American families are paying the price.

A large part of the problem is the lack of regulation in U.S. oil markets that followed the implementation of the Enron loophole, which Congress enacted in 2000 to exempt energy speculators from regulation.  That year, 70 percent of oil trading was done by the industry, with just 30 percent coming from speculators.  Today, those figures are reversed and trading volume has increased six fold. During that time, the price of a barrel of oil has also increased by more than 500 percent, from $27 to more than $140 per barrel. In hearings last week, experts testified before Congress that speculation in the U.S. oil markets may be responsible for up to 50 percent of the inflated cost of oil. The International Monetary Fund has also acknowledged the significant impact of speculation in the market.

The Commodities Futures Trading Commission (CFTC) has the ability to dramatically ease the burden high gas prices have on American families.  By using its emergency authority granted in the Commodity Exchange Act, the CFTC can investigate and decrease speculation in the oil market and ensure that prices are fair. Unfortunately, the CFTC has failed to use this power to stop excessive speculation.

Our nation’s families are suffering, and the American Dream is becoming unattainable for millions of our fellow citizens.  You have the power to provide immediately help to ease his burden, and I hope you will use it.  I urge you to provide immediate relief to American families and American businesses by directing the CFTC to utilize its powers.

Thank you in advance for your attention and your swift action on this critical issue.

    John Yarmuth
    Member of Congress