Washington, DC—Senate Majority Leader Harry Reid made the following statement today before a Senate Energy Committee workshop to examine why oil and motor fuel prices are so high and what can be done about them. Below are his remarks as prepared for delivery:
“I appreciate the opportunity to speak at this important event. Thank you, Chairman Bingaman, for taking the initiative to organize this workshop.
“With gas and oil prices setting record prices almost every day, it is clear to all of us that the American people are suffering and deserve solutions. Is there one magic pill that will bring energy prices back to sanity? Of course not. But I am hopeful and confident that if we cast aside the partisan divide, we can begin to stem this growing crisis.
“This issue spreads far wider than the reach of the Energy Committee alone. It is fair to say that nearly every Committee has a piece of this intricate oil and gas puzzle – whether it’s speculation, the weak dollar, political instability in the Middle East, growing cleaner and more affordable alternative fuels, tax incentives, or increasing the efficiency of our transportation sector.
“I hope that other Committees will follow the lead of Chairman Bingaman to join the process of finding cost-effective, sensible solutions to our dangerous addiction to oil and the high oil and gas prices crippling our economy.
“The crossroads of record prices and ever-increasing global demand for oil has brought our nation and the world to a crossroads we knew would one day come. For America, the yawning gap between our meager petroleum resources and our enormous dependence and consumption of oil has finally caught up with us.
“We cannot continue forever to consume 25 percent of the world’s oil when we have only 2 percent of the world’s supply. That is simple math.
“With the many regionally-based energy interests in our country, moving Congress toward a cleaner and safer energy future has never been easy. That critical task has been more difficult with a President that has not shown the necessary leadership to end our addiction to oil and move toward clean, renewable fuels.
“That said, we did make progress last year. Bipartisan progress. We worked together to pass last year’s landmark energy bill, which moves us – slowly – in the right direction.
“But we all know that that bill is only a small down payment on the transformation that must take place, if we are going to meet the urgent economic, national security and global warming challenges that we can’t afford to ignore any longer.
“I hope today’s event will bring forward new, sensible ideas that can help relieve the enormous burdens of high gas prices on consumers in the near term and the long-term. We need good ideas, like those offered by T. Boone Pickens and others. As most know, T. Boone Pickens is an oil man and a staunch conservative. But T. Boone Pickens realizes the enormity of our energy crisis. That is a pretty good model for the kind of bipartisanship it will take to solve this problem.
“This week, I have introduced one solution on the Senate floor: legislation to stem the excessive speculation in the energy markets that many economists believe accounts for 20 percent to 30 percent or more of the price we pay at the pump.
“Eight years ago, the ‘Commodity Futures Modernization Act’ for the first time created a whole new class of traders to enter the commodities market without the same constraints faced by people trading in the actual physical commodity. Because of this new law, a ‘mouse-click’ energy market was born overnight. That means that right now, Wall Street traders can raise oil and gas prices simply by logging onto their computers and executing a few trades. Without regard for anything but their own profits, traders are bidding up prices by buying huge quantities of oil just to resell at an even higher price.
“The result has been a new class of investor getting rich by buying oil only to turn around and sell it at an ever higher price, only to stick consumers with the bill. Our legislation will finally hold the energy futures market to the same standards of accountability that other futures markets are held.
“This is a matter of fairness and common sense. We’re not saying that all speculation is bad. It can be healthy in a well-functioning market. It can help the market find the most efficient price. But without proper market oversight, speculation has gotten out of hand, and that is one reason for record gas prices.
“As I have said, curbing excessive speculation is not the solution to our energy crisis. But it is one step – an important step that we can take now to lower prices and ease the burden of this crisis for the American people.
“I hope my Republican colleagues will support these efforts. And Democrats are happy to reciprocate. The point of this workshop is to come up with new ideas. If Republicans have other ideas that they think will help, Democrats are all ears. Thank you for your time, and I look forward to a productive workshop and a good bipartisan effort to find solutions for the American people.”