Thanks to pressure from a coalition led by the Air Transport Association, a bill has been introduced in Congress that would limit excessive speculation by investors, which, the coalition says, is responsible for some of the increase in oil costs, driving up prices $20 to $60 per barrel.
Last week, Sen. Harry Reid (D-Nev.) introduced the Stop Excessive Speculation Act (S. 3268), which would give the Commodities Futures Trading Commission new resources to prevent and punish price manipulation and excessive speculation in the oil markets.
ATA president and CEO James May applauded the bill, saying it would close existing loopholes that have allowed traders to excessively buy and sell commodities, such as oil. The speculative trading, May argues, has increased the price of commodities out of proportion to marketplace demands. The coalition called for Congress to close loopholes and reinstate limits on speculative trading that were lifted in 2001.
The ATA-led coalition of airline, travel, and related organizations—dubbed “Stop Oil Speculation Now”—called a press conference July 12 during which coalition leaders blamed speculators for oil price increases of $20 to $60 dollars per barrel. That jump, they said, translated to increases between 48 cents and $1.48 at the gas pump. “We are here to declare mayday over the price of oil,” stated Capt. John Prater, president of the Air Line Pilots Association, which along with organizations such as the National Business Travel Association and the Association of Corporate Travel Executives make up the new 38-member coalition. To get action on their concerns, coalition members wrote letters to customers urging them to contact their representatives. Congress received more than 1 million letters on the oil speculation issue.
Airlines have been particularly hard hit by rising oil prices, May said. This year the airline industry saw some 30,000 layoffs, route cutbacks in about 100 communities, a handful of carriers filing for bankruptcy or going out of business, and will report overall losses of up to $10 billion. Passengers are feeling the effects with rising airfares and reduced service. Airfares climbed 31 percent in the first quarter according to ATA.
Coalition officials want Congress to fast-track this bill so that it is enacted before Congress breaks at the end of August. According to May, the coalition recognizes that it is not the long-term solution to the energy crisis, but they believe restrictions on speculators are a measure that could alleviate some of the pain at the pump in the short-term.
For more information, go to www.stopoilspeculationnow.com.