Remarks by the President on Increasing Oversight on Manipulation in Oil Markets
Rose Garden
11:27 A.M. EDT
THE PRESIDENT: Good morning, everybody. Lately, I've been speaking a
lot about our need for an all-of-the-above strategy for American
energy -- a strategy that produces more oil and gas here at home, but
also produces more biofuels and fuel-efficient cars, more solar power
and wind power and other sources of clean, renewable energy.
This strategy is not just the right thing to do for our long-term
economic growth; it's also the right way for us to reduce our
dependence on foreign oil right now. It's the right way for us to put
people to work right now. And ultimately, it's the right way to stop
spikes in gas prices that we've put up [with] every single year -- the
same kind of increase that we've seen over the past couple of months.
Obviously rising gas prices means a rough ride for a lot of families.
Whether you're trying to get to school, trying to get to work, do some
grocery shopping, you have to be able to fill up that gas tank. And
there are families in certain parts of the country that have no choice
but to drive 50 or 60 miles to get to the job. So when gas prices go
up, it's like an additional tax that comes right out of your pocket.
That's one of the reasons we passed a payroll tax cut at the beginning
of this year and made sure it extended all the way through this year,
so that the average American is getting that extra $40 in every
paycheck right now.
But I think everybody understands that there are no quick fixes to
this problem. There are politicians who say that if we just drilled
more then gas prices would come down right away. What they don't say
is that we have been drilling more. Under my administration, America
is producing more oil than at any time in the last eight years. We've
opened up new areas for exploration. We've quadrupled the number of
operating rigs to a record high. We've added enough new oil and gas
pipeline to circle the Earth and then some.
But as I've said repeatedly, the problem is we use more than 20
percent of the world's oil and we only have 2 percent of the world's
proven oil reserves. Even if we drilled every square inch of this
country right now, we'd still have to rely disproportionately on other
countries for their oil. That means we pay more at the pump every
time there's instability in the Middle East, or growing demand in
countries like China and India.
That's what's happening right now. It's those global trends that are
affecting gas prices. So even as we're tackling issues of supply and
demand, even as we're looking at the long-term in terms of how we can
structurally make ourselves less reliant on foreign oil, we still need
to work extra hard to protect consumers from factors that should not
affect the price of a barrel of oil.
That includes doing everything we can to ensure that an irresponsible
few aren't able to hurt consumers by illegally manipulating or rigging
the energy markets for their own gain. We can't afford a situation
where speculators artificially manipulate markets by buying up oil,
creating the perception of a shortage, and driving prices higher --
only to flip the oil for a quick profit. We can't afford a situation
where some speculators can reap millions, while millions of American
families get the short end of the stick. That's not the way the
market should work. And for anyone who thinks this cannot happen,
just think back to how Enron traders manipulated the price of
electricity to reap huge profits at everybody else's expense.
Now, the good news is my administration has already taken several
actions to step up oversight of oil markets and close dangerous
loopholes that were allowing some traders to operate in the shadows.
We closed the so-called Enron loophole that let traders evade
oversight by using electronic or overseas trading platforms. In the
Wall Street reform law, we said for the first time that federal
regulators will make sure no single trader can buy such a large
position in oil that they could easily manipulate the market on their
own. So I'd point out that anybody who's pledging to roll back Wall
Street reform -- Dodd-Frank -- would also roll back this vital
consumer protection along with it.
I've asked Attorney General Holder to work with Chairman Leibowitz of
the Federal Trade Commission, Chairman Gensler of the Commodity
Futures Trading Commission, and other enforcement agencies to make
sure that acts of manipulation, fraud or other illegal activity are
not behind increases in the price that consumers pay at the pump.
So today, we're announcing new steps to strengthen oversight of energy
markets. Things that we can do administratively, we are doing. And I
call on Congress to pass a package of measures to crack down on
illegal activity and hold accountable those who manipulate the market
for private gain at the expense of millions of working families. And
be specific.
First, Congress should provide immediate funding to put more cops on
the beat to monitor activity in energy markets. This funding would
also upgrade technology so that our surveillance and enforcement
officers aren't hamstrung by older and less sophisticated tools than
the ones that traders are using. We should strengthen protections for
American consumers, not gut them. And these markets have expanded
significantly.
Chairman Gensler actually had a good analogy. He said, imagine if the
NFL quadrupled the number of teams but didn't increase the number of
refs. You'd end up having havoc on the field, and it would diminish
the game. It wouldn't be fair. That's part of what's going on in a
lot of these markets. So we have to properly resource enforcement.
Second, Congress should increase the civil and criminal penalties for
illegal energy market manipulation and other illegal activities. So
my plan would toughen key financial penalties tenfold, and impose
these penalties not just per violation, but for every day a violation
occurs.
Third, Congress should give the agency responsible for overseeing oil
markets new authority to protect against volatility and excess
speculation by making sure that traders can post appropriate margins,
which simply means that they actually have the money to make good on
their trades.
Congress should do all of this right away. A few weeks ago, Congress
had a chance to stand up for families already paying an extra premium
at the pump; congressional Republicans voted to keep spending billions
of Americans' hard-earned tax dollars on more unnecessary subsidies
for big oil companies. So here's a chance to make amends, a chance to
actually do something that will protect consumers by increasing
oversight of energy markets. That should be something that everybody,
no matter their party, should agree with. And I hope Americans will
ask their members of Congress to step up.
In the meantime, my administration will take new executive actions to
better analyze and investigate trading activities in energy markets
and more quickly implement the tough consumer protections under Wall
Street reform.
Let me close by saying none of these steps by themselves will bring
gas prices down overnight. But it will prevent market manipulation
and make sure we're looking out for American consumers. And in the
meantime we're going to keep pursuing an all-of-the-above strategy for
American energy to break the cycle of price spikes year after year.
We are going to keep producing more biofuels; we're going to keep
producing more fuel-efficient cars; we are going to keep tapping into
every source of American-made energy.
And these steps have already helped put America on a path to greater
energy independence. Our foreign -- our dependence on foreign oil has
actually decreased each year I've been in office -- even as the
economy has grown. America now imports less than half of the oil we
use for the first time in more than a decade. So we are less
vulnerable than we were, but we're still too vulnerable.
We've got to continue the hard, sustained work on this issue. And as
long as I'm President we're going to keep placing our bets on
America's future -- America's workers, America's technology, America's
ingenuity, and American-made energy. That's how we're going to solve
this problem once and for all.
Thank you very much, everybody.
END
More:
http://www.whitehouse.gov/the-press-office/2012/04/17/remarks-president-increasing-oversight-manipulation-oil-markets
--
Together, we can change the world, one mind at a time.
Have a great day,
Tommy
--
Together, we can change the world, one mind at a time.
Have a great day,
Tommy
--
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