Washington, DC—Senate Majority Leader Harry Reid made the following statement today on the floor of the U.S. Senate:
“Sometimes the people viewing our proceedings from the visitors’ gallery – and those tuned in on television – must think they are watching an episode of Twilight Zone. Such was the case yesterday morning. Senator McConnell and I both opened the floor with remarks about our national energy crisis. We both talked about the pain that high gas prices are causing the American people.
“I mentioned a public school teacher and his wife, from upstate New York, who are now spending all the money they used to save for their children’s college education to pay for gasoline. Senator McConnell, for his part, talked about the frustration of truckers, stay-at-home parents, commuters and vacationers.
“Anyone watching our two sides talk about the gas prices must have been saying to themselves – if they both agree on the problem, why can’t they work together to find solutions? The reason for that is simple: Republican leaders refuse to join us at the negotiating table. They refuse to legislate. They refuse to take yes for an answer.
“We will shortly vote on cloture to proceed on legislation to stem the excessive speculation by Wall Street traders that is contributing to high gas prices. Is this the problem? Of course not.
“Democrats have said from the start that curbing speculation is not a silver bullet that will solve all our energy problems with the snap of our fingers. But with experts saying that speculation accounts for 20 percent, 30 percent, even 50 percent of the price of gasoline, there is no doubt that it is a major part of the problem.
“How does excessive speculation drive up prices? Short term Wall Street traders simply buy oil, sell it, and repeat – bidding the price ever higher. They never intend to actually own or use the oil they buy – only to keep buying and selling and pocketing the profits. The problem is, the American people are stuck paying the bill every time we fill up our gas tanks.
“This kind of unlimited energy speculation wasn’t even legal eight years ago for traders who never intend to buy or sell the actual commodity. Back then, you would have to actually take delivery of the oil you bought or face position limits on your trading. Few Wall Street firms wanted tankers pulling up to their front doors with 100,000 barrels of oil, so the market price of oil was decided by honest marketplace supply and demand.
“Then, the Republican Congress allowed oil to be traded back and forth without delivery. That effort was led by former Senator Phil Gramm – the same Phil Gramm who serves as Senator McCain’s chief economic advisor and recently called America a ‘nation of whiners.’ Senator Gramm’s bill created a ‘mouse-click’ energy market – which the Bush Administration has done practically nothing to oversee. Now, the American people are suffering the consequences.
“Nothing is ever certain in the energy market, but if our legislation to provide new consumer protections on speculation becomes law, it should immediately and sustainably lower prices. And we are not the only ones who think so. Aside from the experts who agree, like former CFTC Trade Division Director and current economics professor at the University of Maryland Michael Greenberger; consumer advocate Mark Cooper; and even the Senior Vice President of Exxon Mobile, Stephen Simon, Senate Republicans themselves have identified energy speculation as significant part of the problem.
“Republicans have said in speeches and press conferences that we should do something about speculation. It has been a component of their energy plan. Senator McConnell said on the floor just yesterday: ‘Strengthening regulation of the futures market is a worthwhile piece of any legislative effort…’
“The American people must be thinking – Democrats and Republicans do not agree on much, but they seem to agree that curbing excessive energy speculation is a part of the solution. Yet now that a reasonable and responsible speculation bill has reached the floor, Republicans seem to be scurrying into the corners and shadows.
“Now that we have an opportunity to actually do something to deliver some relief to the American people, all Republicans want to talk about is more domestic drilling. Democrats have shown just how serious we are about addressing this problem.
“We have said to our Republican colleagues: Along with our speculation bill, we will give you a vote on your offshore drilling plan. Republicans can have a vote on their drilling plan, and we will have a vote on the Democratic drilling plan to get the oil companies to start using the 68 million acres of land they currently lease but are not using. We don’t think it makes sense to start giving up more acres of American coastline when oil companies aren’t even using the land they have. They’re just holding the land as another asset on their balance sheets.
“We certainly don’t think it makes sense to open up more coastal land for drilling without the assurance that any oil discovered will stay right here in America, instead of being shipped off to foreign countries.
“And we also realize that, although increasing domestic oil production should be a part of the solution, it takes years – even decades – for offshore oil to be explored, drilled and distributed.
“This week’s Time Magazine explains how the process would likely take 13 years until we see the first drop of oil. The American people can’t wait 13 years for lower gas prices. Increasing production is important – but even Republicans must admit that it will do absolutely nothing to lower prices in the near-term. Nonetheless, Republicans have called for a vote on their offshore drilling plan, and we are willing to give them exactly what they want.
“Here is how the process should work: We hold a vote on curbing energy speculation – which Republicans agree is ‘worthwhile.’ We hold a vote on the Republican offshore drilling plan. And we hold a vote on the Democratic domestic production plan that increases production on the land oil companies already lease.
“Both sides would have the opportunity to make their case, and we could pass legislation that might actually lower prices at the pump.
“Senator McConnell concluded his remarks yesterday by saying: ‘[gas prices are] a big problem, and the problem is bigger than just speculation; good ideas from all sides should be considered. It’s what the American people demand.’
“I agree with every one of those words. We have offered a plan to not only consider ideas from both sides, but to vote on them as well. If Republicans are serious about the words they have spoken, this is where the rubber meets the road.
“It is not just our job, but our solemn responsibility to legislate when our country faces a crisis. We face a crisis now. And now is the time to take action.
“It has become clear that Republicans plan to filibuster any solution to our energy crisis that will help right now. They are only interested in locking up more land for the oil companies who are doing little to nothing with the land they already have.
“The Republican approach to energy is to try to secure a thousand yesterdays for their friends in the oil industry. But there can be no more yesterdays. We must plan for and invest in tomorrow with short term solutions like curbing speculation – and long term solutions like requiring the oil companies to use the land they have – and investing in the clean, renewable fuels we can produce right here in America that will end our addiction to oil forever.”