Obama Fights Gas Prices By 'Reconstituting' Oil Speculation Task Force
WASHINGTON -- President Barack Obama announced Tuesday that he has asked Attorney General Eric Holder to "reconstitute" a task force examining oil and gas speculation.
But the task force, which Obama initially proposed last April when a big spike in gas prices sparked public outrage, has met only four or five times, mostly around the time it was created, and has not reported to the public on its activities, McClatchy News Service reported. Critics say the group has fallen short of its mission thus far.
Precisely what Obama has asked the group to focus on at this time remains somewhat unclear. Justice Department spokeswoman Adora Andy explained in an email to The Huffington Post, “At the President’s direction, the Attorney General -– through the Oil and Gas Price Fraud Working Group –- is aggressively focused on identifying civil or criminal violations in the oil and gasoline markets, and ensuring that American consumers are not harmed by unlawful conduct, which remains an important priority. With the recent increase of gasoline prices, the working group is monitoring the situation and if we find any evidence of criminal behavior or other misconduct we will respond immediately."
The topic of gas prices came up at Obama's press conference on Tuesday after a Fox News reporter asked if the president was on purpose driving up gas prices to wean Americans off fossil fuels. "Just from a political perspective, do you think the president of the United States going into reelection wants gas prices to go up higher?" he asked, with a laugh. "Is there anybody here who thinks that makes a lot of sense?"
Obama said there is "no silver bullet" to lowering high gas prices. Rather, he said, he endorsed an "all of the above strategy," that includes increased domestic production, energy conservation and the development of renewable energy.
His plans also involve "making sure that my attorney general is paying attention to potential speculation in the oil markets," Obama said. To that end, he said, "I've asked him to reconstitute a task force that’s examining that."
Last April, Obama announced that he had asked Holder to put together "a team whose job it is to root out any cases of fraud or manipulation in the oil markets that might affect gas prices, and that includes the role of traders and speculators."
When Holder announced the body's formation, it was not a task force but a working group and not investigative in nature. Rather than being made up of prosecutors, the Oil and Gas Price Fraud Working Group -- a subgroup of the Financial Fraud Enforcement Task Force -- included representatives from various administrative agencies. Its charge was to "monitor oil and gas markets for potential violations of criminal or civil laws."
At the time Holder promised, "if illegal conduct is responsible for increasing gas prices, state and federal authorities should take swift action.”
Tyson Slocum, director of the energy program for consumer group Public Citizen, said the Obama administration "isn't reconstituting this task force because this task force wasn't even meeting in the first place."
"He's probably reminding Holder to remind people that they're on the task force and that perhaps the task force should think about meeting at some point," Slocum said. "It kind of shows that this is a bit of a farce."
Slocum also noted that several agencies theoretically represented on the task force already have unilateral authority to investigate speculation. "It's our opinion that none of them are doing it."
The fact that speculation contributes to high gas prices is hardly a radical idea.
No less an authority than Exxon Mobil's chairman, Rex Tillerson, has acknowledged that Wall Street trading has at times been responsible for driving up prices by $30 to $40 a barrel.
Forbes recently estimated that speculation in oil futures on commodities exchanges has driven up the price of a barrel of oil by $23.39, which translates into a $.56 a gallon surcharge.
Last August, Vermont independent Sen. Bernie Sanders leaked confidential data from the Commodity Futures Trading Commission to the Wall Street Journal that exposed how much Goldman Sachs, Morgan Stanley and other Wall Street speculators dominated the crude oil futures market during the April gas price increase.
"The president, in my view, has got to be a lot more aggressive on this," Sanders told HuffPost on Tuesday.
Sanders noted that the Dodd-Frank Act, signed into law in July 2010, gave the Commodity Futures Trading Commission until January 2011 to set rules curbing speculation in the energy and other markets. "They haven't done it," Sanders said. "We're in March 2012 now, and nothing has happened, and this is ridiculous." Sanders on Monday sent a letter cosigned by 70 members of Congress demanding that Gary Gensler, the chair of the Commodity Futures Trading Commission, immediately adopt tougher rules.
On Tuesday, Sanders waved off Obama's talk of a task force, saying, "It might be quicker and faster to get on the phone to Chairman Gensler."