House Speaker Nancy Pelosi asked President Bush Wednesday to “immediately direct” the Commodity Futures Trading Commission (CFTC) to use its existing emergency authority under the Commodity Exchange Act to restore order to the crude oil and gasoline markets in the United States (see Daily GPI, June 25).

“Despite growing reports of excessive speculation in energy markets, the CFTC has refused to act,” she wrote in a letter to Bush. “The CFTC’s prompt action would send a strong signal to the market that [the] CFTC will be both a ‘cop on the beat’ and be prepared to use its power to address systemic weaknesses that are contributing to market instability.”

On the House floor, Pelosi said, “Today we are putting oil speculators on notice…Eight years ago, before another Congress made the Enron loophole law, 70% of the energy futures market trades were made by the industry — only 30% by speculators. Today those numbers are reversed — and trading volume has increased six-fold.”

Pelosi said experts testified this week in Congress that “the explosion of speculation in the oil futures market could be driving up prices from $20 to $60 per barrel. Oil speculators are making money by betting against the American consumers at the pump.”

House leaders plans to offer a resolution Thursday that “would lower fares for mass transit and expand services for commuters literally forced from their cars by the oil industry,” she noted.

The Democratic leadership Thursday also expects to take up under the suspension calendar the so-called “use it or lose it” bill, which would require producers to actively pursue production on their existing oil and natural gas leases or face the prospect of paying high fees. The fees would escalate if the leases go unused over the course of several years, reaching as much as $50 an acre each year.

Under the House suspension rules, debate is limited to one hour and no amendment can be offered. But the trade-off is that the House has to pass the proposal by a two-thirds majority or greater.

The “use it or lose it” measure is widely opposed by Republicans and the oil and natural gas industry, which argues that — contrary to the beliefs of House Democrats — it is not sitting on leases to push energy prices upward.

So far this week, Democrats have not had a good track record in pushing through energy measures prior to leaving for the week-long Fourth of July recess. The House voted 276-146 Tuesday in support of a measure (HR 6346), sponsored by Rep. Bart Stupak (D-MI), to protect consumers from price gouging of gasoline and other fuels, but it failed to get the the two-thirds needed to pass it under the suspension calendar.

In another setback for Democrats, the House Agriculture Committee Tuesday postponed a scheduled markup of a bill addressing increased speculation in the energy markets until after the July Fourth recess. The bill calls for increased funding for the CFTC to hire 100 additional employees in fiscal year 2009 to oversee increased trading in the commodities futures markets, particularly the energy and agriculture markets.

“That’s what happens when you try to rush things,” said a Capitol Hill observer.

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