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FUEL COST, ONE SOLUTION * USA - Bill advances to close loophole blamed for energy speculation
The U.S. Senate overwhelmingly overrode President Bush’s veto of the Farm Bill last week, voting 82-13 to approve the bill that also aims to close a legal loophole championed by Enron, which allows energy commodities to inflate gas and diesel prices
Washington,DC,USA -Land Line Magazine, by Charlie Morasch -May 27, 2008: -- Any closing of the “Enron” loophole could have a profound effect on trucking. Energy industry insiders have estimated as much as a third of the per-barrel cost of crude oil is driven by investment speculation... The bill would close a loophole in market trading regs that currently allows for “over-the-counter” trading of energy futures – essentially allowing investors to gamble and reap large rewards on the escalation of oil prices... Hedge fund manager Michael Masters reportedly told a U.S. Senate committee last week that oil prices are being driven almost as much by speculators as they are by Chinese demand. According to Financial Post, annual Chinese petroleum demands increased 920 million barrels in the past five years, while demand driven by speculation tallied 848 million barrels... The Farm Bill isn’t likely to be the last legislation aimed at reforming energy trade... A statement from Sen. Sherrod Brown, D-OH, said the proposed act would: protect consumers from price gouging during an official “energy emergency;” would prevent traders of U.S. crude oil from routing transactions through off-shore markets without speculative limits; would allow the U.S. to enforce penalties against countries or companies colluding to set oil prices; and would roll back $17 billion in tax breaks for oil and gas companies... Labels: fuel costs solution
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