Jeff Bingaman United States Senator from New Mexico

WASHINGTON – U.S. Senator Jeff Bingaman today said he is disappointed that a bill to reduce excessive speculation in the oil markets failed when it did not receive the 60 votes it needed to end debate.  The vote was 50-43.The Stop Excessive Energy Speculation Act of 2008 sought to reduce the amount of excessive speculation in the oil markets.  The bill would have:

·         Increased the resources and authority needed by the Commodities Futures Trading Commission (CFTC) to detect, prevent, and punish price manipulation and excessive speculation and;

·         Given the CFTC emergency authority needed to rapidly implement the legislation.

·         S. 3268 would also strengthen the amount and quality of information available to the CFTC so that the Commission can better regulate all aspects of the energy futures markets.

·         Provided better transparency in the trading of energy derivatives by closing the "London Loophole" so that oil traders using a foreign exchange cannot manipulate the price of oil in the United States.

·         Required the CFTC to implement position limits to restrict excessive speculation that would still allow for reasonable trading for price discovery, liquidity, and legitimate hedging purposes.

"Many experts agree that speculation on Wall Street is having a serious effect on the price of oil.  I believe this bill would have cracked down on some of that speculation and helped bring down oil prices.  I'm disappointed that it failed," Bingaman said.

Today's action means the Senate will not immediately consider an amendment to the introduced to the Stop Excessive Energy Speculation Act of 2008 that would have emphasized both increased domestic oil and gas production by encouraging energy companies to drill on existing leases and help Americans conserve energy. 

The Senate is currently debating legislation aimed at reducing speculation in oil markets, which many believe has led to higher oil prices.  Bingaman introduced his proposal as an amendment to that bill.  

The amendment would have:

Fast Tracked Domestic Production. Right now, oil companies hold leases to 68 million acres of American land that they should be exploring and drilling but are failing to do so.  The amendment would have sped up the production of oil and gas from federal lands, by allowing the Secretary of the Interior the authority to shorten lease terms, raise rental rates on new leases, and require oil companies to comply with benchmarks on their progress. The amendment also would have accelerated leasing land already available in Alaska, the Central and Western Gulf of Mexico, and other areas -- without resorting to drilling in environmentally protected areas. All told, these new areas are estimated to contain tens of billions of barrels of oil.  That's enough to displace oil imports from the Persian Gulf for nearly a century. 

Increased Oil Supplies Now.  The amendment would have required a sale of high-quality light crude oil now held in the Strategic Petroleum Reserve and replace it with lower-quality heavy crude.  The intent was to add more high-quality crude to a very tight market and provide immediate relief to consumers.  Ninety percent of the proceeds generated from this sale would have be invested in LIHEAP, the Federal program to help families, senior citizens and people with disabilities afford the cost of heating and cooling their homes.

Reduced Demand. The amendment included several steps to tackle the demand side of the energy crisis.  It promoted public transit and make smart investments in the clean, renewable fuels and battery technologies we need to end our addiction to oil in the future.  It also encouraged conservation through an American oil savings action plan, with targeted savings of 2.5 million barrels per day by 2016, growing to 10 million barrels per day in 2030.  The measure also included $1 billion to help retool Detroit to make more efficient vehicles.

Eliminated Giveaways.   The amendment would have repealed mandatory deepwater and deep gas royalty relief for Outer Continental Shelf leases in the Gulf of Mexico and make it easier for the Department of the Interior to collect accurate amounts from the oil and gas companies drilling on public lands.

            "New Mexicans are worried about high energy prices.  So it's my hope that we will find another opportunity to consider this important proposal," Bingaman said.