Monday, March 28, 2011/lk
SEATTLE - In an announcement last week, U.S. Senator Maria Cantwell (D-WA) demanded federal regulators use the authority she granted them in 2007 to ensure skyrocketing prices at the gas pump are not the result of market manipulation or other anticompetitive behavior.
According to AAA figures, Washington state gas prices have gone up 40 cents-per-gallon in just the last month, hurting small business and burdening families and the economic recovery.
Every 50-cent increase in gas prices costs Washington households 1 percent of their annual income, on average, or roughly $565 using 2010 average household income numbers.
"While oil speculators on Wall Street may be profiting from Middle East turmoil, Washington families and businesses on Main Street are footing the bill at the gas pump," Cantwell said. "Unlike when gas prices spiked suspiciously in the summer of 2008, the Federal Trade Commission now has the necessary tools to be the cop on the beat protecting consumers from artificial gas price hikes."
Cantwell sent a bipartisan letter to the Federal Trade Commission (FTC) calling for an investigation into any links between rising gas prices and a sharp increase in wholesale oil markets.
In August 2009, the FTC finalized its Petroleum Market Manipulation Rule, which was promulgated in compliance with legislation Cantwell authored in 2005 and successfully shepherded into law in 2007. The law makes it a crime to manipulate wholesale oil markets.
Now she is calling on the consumer protection agency to use its new authority to meet their responsibility to protect consumers.
In the letter to the FTC, Cantwell noted the price per barrel of oil over the past four years has varied drastically despite comparatively little change to the world's supply and demand.
She asserts that the FTC must be more proactive and aggressive in enforcing its market manipulation rule, noting the success the Federal Energy Regulatory Commission has had in ferreting out bad actors in the electricity and natural gas markets using identical authority, and she details several questions she wants answered to shed light on any illegal activity that is behind the pain at the pump.
This isn't the first time Cantwell has applied pressure on agencies to investigate energy price increases.
Using lessons learned from the Enron scandal, Cantwell helped author provisions in the 2005 Energy Bill that made it a crime to manipulate electricity or natural gas markets.
To date, the Federal Energy Regulatory Commission has used the law to conduct 93 investigations resulting in 45 settlements and civil penalties of more than $122 million and disgorgement of profits totaling nearly $36 million.