President Barack Obama’s call for more oversight of the nation’s oil markets to curb speculation and manipulation will do little to affect the price of gas, Rep. Joe Barton, R-Texas, tells Newsmax.TV
Obama, in a move designed to blunt a major election year issue, called for more oversight and regulation of commodity traders and stiffer civil and criminal penalties, raising the penalty for a violation from $1 million to $10 million a day.
Obama said the nation can’t afford speculators making millions while “Americans get the short end of the stick.” However, he admitted the new layer of regulation, which must be approved by Congress, would not bring down gas prices overnight.
“Speculation is part of the market and I can’t say they don’t have some price impact, but the main price impact is rising demand and stable or more slowing increasing supplies,” Barton, a member of the House Committee on Energy and Commerce, said. “Even with the Arab oil cartel and the strategic petroleum reserve and things like that it is still a demand market and right now demand is rising more rapidly than the ability of the market to supply it, that’s the primary cause of high prices now.”
Barton said the best way to bring down prices was to reform the federal permitting process for oil and gas leases on federal lands and in federal waters, encourage the use natural gas for transportation, reform permitting for refineries to make them not as expensive to operate and maintain and open more federal lands and outer continental shelf waters to lease development.
Barton did not see the current administration adopting any of his prescriptions.
“President Obama seems to want to be more of a rhetorical energy president than a substantive policy energy chairman,” he said. “He’s wasted hundreds of millions if not billions of dollars on alternative energy loans like Solyndra. He has said he’s not opposed to the Keystone Pipeline to bring more oil into the United States and then turned around and personally called senators to vote against the Keystone Pipeline. So he’s says one thing in his press releases and in his public statements but his policies and his actions go just the other way and as a result I think his policies have constrained energy markets and they have cause prices to be higher than they otherwise would be.”
Barton said that putting more regulators on the case “isn’t going to add one barrel of oil or one gallon of gasoline to the supply chain” and could encourage oil companies to move their trading offshore, away from American regulation.
“I’m not saying we shouldn’t oversee our energy market, I think we should but I think it should be done in a balanced, fair handed way where you are trying to prevent fraud, you’re trying to prevent some sort of market cornering operation,” he said.
“There is absolutely no evidence in the current oil market that any of that type of activity is occurring. We’ve had investigations in the past, the recent past in the last five to 10 years and in every case the conclusion was the markets are operating fairly.
“Again demand is increasing more rapidly than supply the reaction of the market is going to be to raise the price to balance the available supply with increased demand and if there’s huge volatility in the market people hedge and the so-called speculators try to get positions so if prices go higher they can cover them and sometimes that type of activity might influence the price some but over time it’s the basic supply and demand equation that determines the price.”
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