U.S. Senator Susan Collins today met with USAirways CEO Doug Parker to discuss the effect of excessive speculation in the energy futures markets on the price of energy. Senator Collins was last week joined by Senators Joe Lieberman (ID-CT) and Maria Cantwell (D-WA) in introducing the Commodity Speculation Reform Act. The bipartisan legislation will add transparency to futures markets and curb excessive speculation by strengthening the authority of the Commodities Futures Trading Commission (CFTC). The bill will also provide additional resources to the CFTC, whose oversight has grown over the past few years while its resources have dwindled.
The airline industry, including USAirways, has launched a nationwide campaign calling on Congress to address this important issue.
Senator Collins said, “There is compelling evidence that excessive speculation in energy futures markets is a factor driving up the cost of energy. While there are other factors that are beyond our control, the issue of excessive speculation is an issue Congress can and must address. I commend the airline industry for helping to bring additional attention to this crucial energy issue. It is my hope that the Senate will act to swiftly approve our legislation to curtail excessive speculation.
Mr. Parker said, “We appreciate the Senator's recognition of the need to address the situation in a bipartisan, thoughtful way. We will continue to work with her as legislation moves through Congress this month."
In an open letter to all airline customers last week, officials from 12 major airlines wrote: “Our country is facing a possible sharp economic downturn because of skyrocketing oil and fuel prices, but by pulling together, we can all do something to help out now…Since high oil prices are partly a response to normal market forces, the nation needs to focus on increased energy supplies and conservation. However, there is another side to this story because normal market forces are being dangerously amplified by poorly regulated market speculation.”
The industry is calling on Congress to “reform the oil markets and solve this growing problem.”
The Collins-Lieberman-Cantwell Commodity Speculation Reform Act was introduced last week, following a series of hearings conducted by the Senate Homeland Security Committee, of which Senator Collins is Ranking Member.
The U.S. Senate could consider speculation legislation as early as this week.