Sunday, June 22, 2008

Yes we can protect the citizen from the Big Oil Scam!

Recently, I've written a couple of posts about energy speculation and why it's part of the reason for the current energy crisis. This occurs when speculators buy oil on paper with credit, the oil is never delivered and then we are told that supply and demand is driving the prices up.

Then all of a sudden, I read a story that Barack Obama is calling for an end to the speculation many believe is the cause of the out-of-control prices. Some think these high prices are being enabled by a law known as the "Enron Loophole." One would think that after studying all the fraud and financial misdeeds in the Enron scandal -- anything they pushed through Congress would have had action taken on it a long time ago?

Perhaps, I'm a bit of a conspiracy theorist, but having lived in California at the time of the Enron scandal -- I can see clear similarities between that time and now. Two of them are how it is hitting the pocketbook of the average person and that that the economic law of supply and demand is being used as an excuse.

From an article in the Washington Post by Anne E. Kornblut:

Sen. Barack Obama on Sunday rolled out a proposal to curb speculation in energy markets, a plan his advisers said would help stabilize soaring gas prices.

Obama proposed a four-step program that would, among other things, close a so-called "Enron loophole" that protects some energy futures trading from oversight by the Commodity Futures Trading Commission, his advisers said.

The Washington Post article quoted the McCain camp as saying:

"The truth is Barack Obama is following John McCain's lead to close a Wall Street loophole that was signed into law by President Bill Clinton," McCain campaign spokesman Tucker Bounds said in a statement. "John McCain has supported bipartisan efforts to close this loophole and will work to address abuses in oil speculation. Barack Obama has voted the party line for Democrats who claim the loophole is fixed. The fact that Barack Obama is attacking John McCain, despite McCain's leadership on the issue, shows that Barack Obama is driven by the partisan attacks that Americans are tired of."

Do we have a reversal going on? Prior to this all we've seen are statements on conservation and allowing the oil companies to drill in places they weren't allowed to before.

Please note -- the quote from the McCain camp is partially true -- Mr. McCain has in the past supported legislation to close the Enron Loophole. The problem is that it's been awhile since he has brought up doing anything about it. Perhaps, Mr. Obama will make him remember his original concerns with the problem?

MSNBC's Keith Olbermann did an interesting story on this, which I first saw on my daughter's blog (RaleighRD.blogspot.com), which can be seen, here.

This investigative report points out that Ken Lay starting laying the ground work for the Enron Loophole under the first Bush administration with the blessing of then "new" U.S. Commodity Futures Trading Commission. The Enron Loophole was actually signed into law under the Clinton Administration.

Fast forward to the present and the U.S. Commodity Futures Trading Commission is now going to host a International energy market manipulation conference to look into the speculation issue. Is this a sign that the Enron Loophole has gotten out-of-control?

It also points out that it is probable the speculators will do the same thing with alternative energy sources once they come into vogue.

Of course in all fairness to John McCain, he did vote with the minority in 2002-2003 to close this loophole.

Bill O'Reilly also did an interesting talking point on this subject last Wednesday called "Who Is Hurting You at the Gas Pump." Mr. O'Reilly made a great argument that a large percentage of the prices at the pump are being caused by greedy speculators and that the oil industry and OPEC are along for the ride.

Hopefully, Mr. Obama's statement will inspire the rest of the leadership in Washington to do the right thing and take a serious look at this problem.

In closing, those of us who remember the 70's need to remember we should have been taking a holistic approach to the energy problem long ago. We need to develop alternative sources and find ways to produce energy that aren't going to ruin the planet.

If we ignore the recent lessons on how volatile the energy market is -- there is little doubt we will see the problem in the future again -- and wonder why we didn't do anything about it NOW.

I hope this doesn't turn into a flurry of attacks between Mr. Obama and Mr. McCain. Wouldn't it be nice to see them join hands and do what is in the interest of the general public? I'd also like to see support in Washington to foster what should be a bi-partisan effort.

I'm pretty sure the voting public would appreciate this and should they fail to do so might express their frustrations when they exercise their right to vote!

1 comment:

john said...

Why has the Economist magazine stated that speculation is a minor factor for oil/petrol fuel pricing? They note that the actual delivered product pricing is a supply/demand factor. Your rambling suggests the same: we have ignored the realities of a oil-based energy dependency for 30 years? Why? Because the current system has delivered what we want at an acceptable price. If we had included the real long-term costs into current pricing, we would have moved to safer long-run options by now. Now, we have to limit consumption and raise prices dramatically to save the world. Good luck to a democratically inspired solution, we need a energy dictator to save us.