Power Lines: Obama’s Energy Farce
April 18, 2012

The president’s policies have failed, and are making the economy worse.  Yesterday, in order to further distract from his lack of a productive energy plan, the president called for greater federal oversight of oil markets.  With a 106 percent increase in the price of gas since taking office, the president declared a very public “crackdown” on “those who manipulate the market for private gain at the expense of millions of working families.” 

According to a White House statement, the president’s “request would … ensure that the Commodities Futures Trading Commission (CFTC) has the resources it needs to aggressively oversee speculative trading activity in oil futures markets.”  Specifically, the president’s plan would do the following:

• Ask Congress to spend $52 million on additional oversight at the CFTC, to allow regulators to set higher capital requirements in oil markets, and to mandate additional steps;
• Increase penalties for market manipulation to $10 million from $1 million; and
• Request that Congress give authority to the CFTC to raise margin requirements on traders who buy and sell oil futures.

However, as several reports pointed out, what President Obama tried to pass off as a plan was “more politics than substance,” and won’t do anything to help ease the pain at the pump.  In an interview yesterday, former commissioner of the CFTC Michael V. Dunn said that during his tenure on the CFTC, he “never saw any empirical data that said speculators were responsible for an increase or a spike in fuel cost.”   Additionally, Wells Fargo Senior Economist, Mark Vitner, President Obama’s plan is “Really nothing.  Nothing substantive is going to come of this … But the proposal may be more about politics than policies … Whether or not you support the president’s plan, don’t get your hopes up about relief at the pump.”

House Republicans have taken action to put forward a true “all-of-the-above” energy strategy—including approving legislation to move forward with the Keystone XL Pipeline as recently as today.  Under the American Energy Initiative, the House has approved several bipartisan bills that would remove government barriers to production and stops policies that drive up energy costs.  You can see a full list here.  House Republicans remain focused on addressing high gas prices as part of the broader Plan for America’s Job Creators geared toward creating a better environment for the private-sector to grow and create jobs.

For questions or further information contact Sarah Makin