Mr. President, I've been coming to the Senate floor to address the price of oil for several months now and it continues to astound me that every time I speak, the prices continue to go up. The average price of a gallon of regular gas just hit $3.95 in Minnesota and $4.11 nationwide. The price of diesel fuel is at $4.76 per gallon. The price of crude oil recently hit an unbelievable $145 per barrel. And there just seems to be no relief in sight. Prices have gone up more than $1 per gallon over the last six months.  Now, everyone knows that demand hasn't gone up 25% over the last six months, but the prices have gone up $1 per gallon over the last six months. This increase is astonishing, and even more astonishing is the fact that the administration has continued to do nothing about the speculation issue. It continues to do nothing to push the CFTC to use the tools that it has and to push for more tools to do something about the excessive speculation that is going on in this market.
We cannot continue to do business as usual, Mr. President. I've heard from people in Minnesota who have canceled their trips up to their cabins because they simply can't afford to fill up their car with gas anymore. They've canceled their summer vacations. These aren't glamorous summer vacations; these are little cabins up in lakes in Minnesota. I've heard from farmers who are having a hard time making ends meet even in spite of the high commodity prices because the cost of their input -- diesel fuel for farm equipment and fertilizer made from natural gas – has spiraled out of control. I've heard from the CEO of Northwest Airlines, based in Minnesota, about how the speculation in the oil market has so greatly contributed to their costs and made it very difficult for them to continue business as usual.  With prices going up, grounding flights, not having as many flights, leading to more delay in the summer because if a passenger misses a flight -- we just had a hearing on this in the Commerce Committee – there are not many backup flights because there aren't just as many flights. The list goes on. The high price of energy has inflated the price of everything from groceries to transportation to home heating. It has impacted every sector of our economy, from manufacturing to forestry to farms and small businesses.
Middle-class families are already struggling, as you know, Mr. President, with the high cost of health care and college education, and we know we need to do things about that but we keep getting blocked and  we're very hopeful that with a new President we're going to be able to get things done for the middle class. But for now, we have people in my state that simply can't afford the price of gas when you couple it with everything else that's been going on in their lives. We know the statistics. We know what's been happening where the average family in just the last eight years, their wages have gone down about $1,000 a year, but their expenses have gone up $4,000. So that's a net loss of $5,000 a year to them.

Many of the people in my state -- and I know you know this, Mr. Presiding Officer, in Colorado -- many of the people in my state are in rural areas and they really can't have access to public transportation. They don't have a choice in how much they drive. They have to get to work. They have to get to the grocery store. They have to get to the doctor. Any pay increase they have gotten in the last year, if they've even gotten one, has been eaten up by the cost of gas. And more often than not, I will tell you, there haven't been pay increases. But yet as recently as February of this year, the President seemed taken aback when someone asked him about $4 gas. He said -- and I quote -- "You're predicting $4-a-gallon gasoline? That's interesting. I hadn't heard that."

The fact is that this administration has failed to provide Americans with a meaningful energy policy that would provide relief from high gas and energy prices. They saw this coming. They saw it was going on in these international markets, but they failed to act. This country needs a bold energy policy for the future. A policy that will stabilize prices and give consumers more alternatives. Reduce our dependence on foreign oil and provide us with the next generation of home-grown biofuels.

In short, I believe we have to invest in the people, the farmers and the workers from my perspective of the Midwest, not the oil cartels of the Mideast. And the same could be said of any area of this country. This country spends $600,000 every minute on imported oil. That money leaves the pockets of American drivers going overseas and contributes to our enormous trade deficit. It amounts to a tax on the family and businesses of this country and it undermines our national security.

Why does it affect our national security? Well, that's because America has roughly 3% of the world's proven crude oil reserves but we are responsible for about 25% of the world's oil consumption. Now, we know we can't continue on this path without becoming more and more vulnerable to other parts of the world, some of which are politically unstable, some of which we didn't to want do business with, and some of which we don't want to do business with. 

But there is another way. You look at what's going on in Brazil. They've achieved energy security. They've done it with a combination of biofuels. Now, they've got sugar cane so it's easier, but we've got all kinds of things, Mr. President. We've got all kinds of things: switch grass, prairie grass, and other parts of the corn that haven't even been developed. We know we can't do it all with corn. We're talking about algae, we're talking about biofuels, and we're talking about residue from logging. There are all kinds of possibilities. But Brazil is able to do it with a combination of sugar cane and domestic production and a government policy that drove them to energy independence. We need to put together a forward-looking energy policy with the same sense of urgency that we had 40 years ago when we put a man on the moon.
In the long term, this is going to mean strategic investment, putting those standards in place so people will push to buy the hybrid cars, the electric cars, new solar technologies, cellulosic ethanol, and  other forms of energy for biomass. We need to have better fuel efficiency standards for our cars and trucks, and I’m proud that the Senate on a bipartisan basis, for the first time since I was in junior high school, increased the gas mileage standards on cars by ten miles per gallon, but there's so much more we can do. We need a renewable electricity standard. We need to look at other so sources. As I said, we need to do more with nuclear. We need do more to increase responsibly our domestic production. And we need to have functioning refineries. These are long-term solutions and I believe very strongly that they are important and we need to get them done. 

But there is also something that we can do in the short term about high gas prices that will bring immediate relief, and that is to address the there'll market speculation is playing in driving up our energy prices. The administration likes to tell us that these high gas prices are just a simple case of supply and demand. More people are driving so the price of gas goes up. Well, for one thing, we know that's not true in our country. Less people are driving.

We know there have been some increases internationally but when an expert on this, Mr. Gergen, testified before our committee, there's been sort of a leveling off in terms of demand for world oil. But whatever it is, we know that even if there has been an increased demand, it hasn't been 25%, like we've seen $1 a gallon increase in just the last six months. The answer that it’s supply and demand just doesn't hold true any longer.

Listen to what the oil executives have to say on this matter. On October 30, 2007, the CEO of Marathon Oil said $100 oil isn't justified by the physical demand in the market. On April 11 of this year, the CEO of Royal Dutch Shell said, "The oil fundamentals are no problem. They are the same as they were when oil was selling for $60 a barrel." On April 1, a senior Vice President of Exxon Mobil testified before the House and he said that "the price of oil should be about $50 to $55 per barrel."

Well, if oil should be roughly $50 to $60 dollars a barrel given market fundamentals -- as we heard from our oil executives -- why is it trading so high? Why is it trading at over $100 a barrel? If supply and demand, which should be the market forces which determine price, don't explain the high price of gas, what does?

According to the experts, there is a frenzy of unregulated market speculation in the oil futures market that is driving prices up to record highs. I'd like to share a quote from an energy market analyst with Oppenheimer and Company who was recently named by Bloomberg as the top-ranked energy analyst in the country. This is what he said. He said, "I’m absolutely convinced that oil prices shouldn't be a dime above $55 a barrel." Oil speculators include the largest financial institutions in the world, he said. "I call it the world's largest gaming hall. It's open 24/7, and it's totally unregulated. This is like a highway with no cops and no speed limit and everybody's going 120 miles per hour."

Why are these traits, in a commodity as vital at oil, unregulated? You have to go back in time, in middle of the night, in 2000 when a provision was inserted into the Commodity Futures Modernization Act that exempted electronic energy trades from federal regulation. In the absence of oversight, what was once a small niche market became a booming industry, attracting rampant speculation from hedge funds and investment banks, the largest financial institutions in the world, which our expert was talking about the "gaming hall." Oil and natural gas prices became volatile. The provision came to be known as the Enron loophole. Because it made possible the many abuses that triggered the western energy crisis and that led, in part, to the collapse of Enron and cost the economy $35 billion and 600,000 jobs.

I’m pleased to say that we succeeded in partly closing the Enron loophole in the Farm Bill. Those provisions will provide new protections in the natural gas market that will put a new regulation structure on IC, the electronic exchange in Atlanta, where large traders try to "game" natural gas futures on an unregulated electronic exchange. But we need to do more. That's why I’m proud to be a cosponsor of the Stop Excessive Energy Speculation Act of 2008. As you know it was introduced by our leader, Harry Reid, and my colleagues, Senator Durbin, Schumer, Dorgan and Murray, and many others.
This bill has a number of provisions that will fight the kind of excessive speculation that drives up energy prices for hard-working American families. This bill will close the so-called London loophole. It will stop traders from routing transactions through offshore markets in order to get around limits on speculation put in place by U.S. regulators, specifically, the Intercontinental Exchange in London allows trading in American oil futures, gasoline, and home heating oil, with far less stringent reporting requirements than what we have here at home. This has driven a lot of energy trading offshore and out of the reach of our regulators.

This bill will make those foreign trades in American oil and gasoline futures subject to the same reporting requirements as trades made here at home so we can stop a glut of overseas trades from driving up our energy prices. The bill would also require the CFTC to review the Letters of No Action that it has issued to the ICE electronic exchange in Atlanta, and the Dubai electronic exchange which operates in cooperation with Nynex in New York. With these no action letters, CFTC gave the exchanges permission to operate in this country and trade in American energy futures with no oversight from U.S. regulators.

Personally, I don't feel that I can tell the people of my state, the people in Duluth, Minnesota, Rochester, Minnesota, and Worthington, Minnesota, that they should rest easy because the Dubai Financial Services Authority is looking out for them. They know that's not true. We need to let speculators know if they want to trade in American energy futures, they're going to be subject to American regulation.
We had the head of the CFTC, Mr. President, testify before a joint meeting of the Agriculture Committee and Appropriations Committee. I still can’t quite believe the meeting. He was happy we were going to try to give him some more people to work in the agency since they had the enormous decrease at the time we have had the enormous increase in this kind of rapid speculation. But when I tried to push him, I said when I was a prosecutor, I wanted every tool I had, every potential way of trying to get evidence or trying to prosecute a case or a sentence or a bill if it made sense that we could use if we were going after a crook. I said, it wouldn't mean we always use them. Some we may use once a year or some can be a hammer over someone's head and some we use all the time, but you want to have those tools. He didn't seem that interested.  It was at the moment I thought, we are going to do everything we can to prop up the agency and get it moving but we have to have people in charge, cops on the beat that really want to do the job, and that's why I’m so concerned about this administration. You haven't seen the same thing in financial services with Secretary Paulson and Ben Bernanke working with the people in Congress hard on this crisis, as equal footing trying to get things done, communicating with us. I didn't get that same feeling when we had the testimony before our committee.

What else will this bill do? This bill would also convene an international working group of financial market regulators to develop uniform reporting and regulatory standards in the major trading centers around the world to put an end to this problem of speculators shopping around for the country with the weakest regulations, the race to the bottom. The bill will require the CFTC to impose position limits on speculators who trade in energy futures but don't actually produce energy or receive physical delivery of energy commodities. So if you are an investor who buys and sells oil futures but you don't plan to take delivery of actual barrels of oil, this bill will limit how much you can buy and sell so that you won't be distorting prices for your own personal gain. We know that has been going on. A lot of these people took the money out of that subprime mortgage market and then they started playing around in the oil market even though they are not truly involved.
Lastly, the bill is also going  to give the Commodity Futures Trading Commission, the CFTC, the funding authority to hire at least 100 full-time employees so that the commission can strengthen its regulations and improve its enforcement over the energy derivative markets. As a former prosecutor, I can tell you that good laws are not enough. You also need strong enforcement. You need the cops on the beat so you can follow the money. And when you follow the money in this $4 gallon a gas, when you follow the money we know where its going to lead. We know that its going to lead at least a piece of this money to that market manipulation and speculation. 

In conclusion, Mr. President, the cost of energy is hurting Americans from all walks of life and businesses in every sector of the economy. I don't think there's one silver bullet that will solve our energy crisis. It's more like a silver buckshot. We need a bold energy policy to carry our nation forward, and it needs to  include both short-term and long-term solutions.

In the short-term, we need to pass this bill and place stronger limits on market speculation. That will make a difference in the short term, but in the long term, we need to develop our energy resources here at home. We need to improve our refining capacity. We need to improve our domestic production. But we also need -- and this is our long term so when these speculators are looking at America and thinking how much the price of oil is, they need to know we actually have a long-term plan because that, ultimately, is what we bring down the price. When they know we're ready to compete with big oil and we have a plan to help with the efficiency with cars and trucks. That’s our plan. We have a plan, looking at biofuels and truly having a competitive force. Maybe it is not all e-85 like we have in Minnesota, maybe it’s e-10, e-20, so we have a blend of fuel. We have to invest in the research to get us those vehicles and get us that energy. We have to make a national commitment to generate electricity from renewable forces just as my state in Minnesota does and I know there is ground-breaking work in Colorado.

Finally, we have to embrace conservation. This is no longer Jimmy Carter going on TV in a sweater looking glum. The people of this country see this not just as environmental issue, Mr. President. They see it as an economic issue. They want to find ways to save a few bucks, whether it means putting in the right kind of light bulbs or getting meters to go on their washers and dryers so they can figure out when and where to run, or whether it means finding a more fuel efficient car, they’re ready to roll. They want to do something differently. They are ready in my state to embrace conservation as a way to save money for their families. The time is now for Congress to take strong steps toward creating this bold energy policy. American families are depending on us. Thank you, Mr. President. I yield the floor, and note the absence of a quorum.