FOR IMMEDIATE RELEASE:
July 30, 2008
Brian Kennedy (202) 434-8200
Congress Continues to Wag Finger at Ghosts, Real World Energy Solutions Remain On Hold
Washington, D.C. – Congress today failed in yet another attempt to regulate the domestic commodity market in the seemingly endless quest to “do something” to curb high energy prices for consumers. And on the eve of a month long recess, American motorists continue to scratch their heads while emptying their wallets at the pump. Thomas Pyle, president of the Institute for Energy Research (IER), issued the following statement today:
“Congress is pushing a triple crown of energy policy drivel: lawsuits against OPEC, windfall profits taxes, and regulating commodities traders will do nothing to lower prices at the pump.”
“With the bans on offshore and oil shale energy exploration set to expire at the end of September, the best thing Congress can do for consumers is…ironically…nothing. That’s an achievable goal for any politician.”
The latest effort by Congress to “do something” about high oil prices, is an amendment to the Commodity Exchange Act that would considerably alter the operations of the commodities futures markets by reducing liquidity, reducing the number of players in the markets, weakening the price discovery mechanism of the markets, making it harder to hedge against risk, and possibly yielding higher commodity prices. Furthermore, the measure is likely to drive capital to foreign markets without similar restrictions. And worst of all, the measure could harm retirement portfolios by significantly hindering the ability of major pension plans and investment funds to hedge inflation risks through exposures to broad-based commodity indices.
For more on the role of speculation in energy markets: Speculators Not to Blame for High Gas Prices
The Institute for Energy Research (IER) is a not-for-profit public foundation that conducts intensive research and analysis on the functions, operations, and government regulation of global energy markets. Founded in 1989, IER is funded entirely by tax deductible contributions from individuals, foundations and corporations. No financial support is sought for or accepted from government (taxpayers).