E2-Wire

House Dems press Holder to probe oil-market manipulation

by Andrew Restuccia - 04/19/12 7:31 PM ET

Obama said earlier this year that he has tasked Attorney General Eric Holder with “reconstituting” a Justice Department-led panel formed in 2011 to explore potential manipulation that might affect gasoline prices.

The Democrats, in their letter Thursday, encouraged Holder to use the panel to “prosecute a vigorous inquiry into the extent to which excessive speculation or outright manipulation are driving up prices in today’s oil and gas markets.”

Democrats have increasingly blamed high gasoline prices at least in part on excessive oil market speculation in recent weeks, countering GOP calls for a dramatic expansion of domestic oil-and-gas development.

Gasoline prices have risen sharply this year, but dropped slightly in recent days to a national average of $3.89, according to AAA.

Republicans have pummeled President Obama and Democrats in Congress over prices at the pump, alleging that they are a result of the White House’s flawed energy policies.

But Obama, keenly aware of polls that suggest he could take a political hit from high prices, has launched his own campaign to counter the GOP’s attacks. He’s touted his “all-of-the-above” energy strategy and underscored his efforts to expand domestic production, while also calling for better oversight of energy markets.

Energy experts say federally policymakers can do little to lower gasoline prices, as they are tethered to oil prices, which are set on world markets. Even a dramatic expansion of domestic oil-and-gas leasing would have little short-term effect on prices, they say.

Here’s the full letter:

April 19, 2012

The Honorable Eric H. Holder, Jr.
Attorney General of the United States
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001

Dear Mr. Attorney General:

We write in support of President Obama’s recent announcement that the Oil and Gas Price Fraud Working Group has been reconstituted and strongly encourage you to use the Working Group to prosecute a vigorous inquiry into the extent to which excessive speculation or outright manipulation are driving up prices in today’s oil and gas markets.

The answer to this question is not academic. Artificially high prices due to excessive speculation or market manipulation function as a hidden tax on American consumers and can impede our ongoing economic recovery. In response to the recent run up in oil and gas prices, credible sources including CFTC Commissioner Bart Chilton and Forbes Magazine have both estimated that the current price of a gallon of gasoline includes a speculative premium of over 50 cents.

Rather than risking a repeat of 2008 – where speculators ran the price of a barrel of oil up to $147 and market manipulators were only identified and charged after the fact – the time to act is now. We urge you to use every investigatory and law enforcement tool at your disposal to ensure the proper functioning of our oil and gas markets.

Sincerely,

Chris Van Hollen

Sander Levin

John D. Dingell

Rosa DeLauro

Anna G. Eshoo

Lloyd Doggett

Tim Bishop

William R. Keating

John Lewis

Jim McGovern

Christopher S. Murphy