Statements and Speeches
Jun 03 2008
As we have watched oil prices break record after record, many of us have expressed concern about the impact of speculators on the price of oil.
Just a few weeks ago, I asked Chairman Inouye to consider holding a hearing on this issue and here we are. I’d like to thank him for responding to my, and many of my colleague’s, request so quickly.
High gas prices are impacting Americans in many ways. Transportation is becoming a larger and larger portion of the household budget. And transportation costs are impacting the cost of everything from groceries to construction.
There are many factors that go into the cost of gasoline. There is the cost of exploration of a finite and possibly dwindling resource. There is the cost of refining crude oil.
There is increasing demand from developing nations, like China and India. There has also been for increasing demand here in the U.S., as vehicle miles traveled has increased 150% since the 1970s.
But there is also the impact of market manipulation and speculation. We have seen speculators drive the Internet bubble and the housing bubble.
And now speculators may be driving the cost of gas higher. But this speculation impacts every single American, hitting working class Americans the hardest.
Today, we will hopefully learn what we can and should do to reduce the impact of speculation on the price of oil and make sure that the price is based on supply and demand. At the least, we need to make sure there is sufficient transparency in our markets and in the participants
If we act soon, this could help all Americans deal by lowering gas prices in the short run and prevent similar, unnecessary price spikes in the future.
However, we have a larger challenge. Even if true market forces are at work, many Americans do not have the ability to opt out of the gas market.
In many areas, if the price of something goes to high, people stop buying it. Then the market reacts and prices come down.
But because of the way most communities have been developed and the limited transportation network we have provided, most Americans have no choice but to buy gasoline.
Let’s restore fair market forces to the price of gas. Let’s ensure we understand who is investing in gasoline and why.
But as we discuss climate change and the reauthorization of the transportation bill next year, we must provide Americans with transportation options so that they can save money on gas, reduce demand and maybe reduce prices too.