Pelosi Statement on FTC Agreeing to Democratic Demand to Investigate Manipulation of Oil and Gas Prices

Contact:Brendan Daly/Nadeam Elshami, 202-226-7616

Washington, D.C. -- Speaker Nancy Pelosi issued the following statement this evening on the decision by the Federal Trade Commission (FTC) to move forward, in a response to a request by House Democratic leaders, on rules governing the manipulation of petroleum prices. The Energy Independence and Security Act (EISA), which became law last December, directs the FTC to ensure that the U.S. petroleum market is free from price or supply manipulation. In the wake of historic increases in oil and gas prices, House Democratic leaders and committee chairmen last week wrote to members of the FTC urging the swift implementation of the EISA market manipulation regulations.

"In our historic energy legislation of last year, Congress gave the FTC the authority to probe possible market manipulation of oil and gas prices and levy penalties against those who are cheating consumers, giving the commission new authority to protect consumers from skyrocketing energy costs. Last week, my colleagues and I wrote to the FTC demanding they move immediately to fully implement this critical ability to investigate gas prices.

"Today, as gas prices increased a record 18th day in a row, the FTC will take the long overdue action of moving forward on efforts to examine the manipulation of energy prices. I thank the FTC for heeding our call to protect consumers by using this new authority to probe oil and gasoline prices and punish those who manipulate the price at the pump."

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Letter from FTC to Speaker Pelosi:

May 2, 2008

The Honorable Nancy Pelosi
U.S. House of Representatives
United States Congress
Washington, DC 20515

Dear Speaker Pelosi:

Thank you for the letter of April 25, 2008, from you and your House colleagues about the Federal Trade Commission's new authority, under Section 811 of the Energy Independence and Security Act of 2007, regarding manipulation in wholesale crude oil, gasoline, or petroleum distillate markets. Today, the Commission will make public an Advance Notice of Proposed Rulemaking (ANPR), and our goal is to complete the Rulemaking process this year. We look forward to working with you and your colleagues as this Rule making moves forward.

Our staff has worked hard to move as speedily as possible. To date, an FTC task force has examined the development and use of anti-manipulation authority by other federal agencies, as well as by the states; met with other government officials (including the Commodity Futures Trading Commission, the Federal Energy Regulatory Commission, and the Securities and Exchange Commission); and, undertaken other tasks, both substantive and administrative, in connection with this legislation. The ANPR announces a comment period of 30 days, following which the agency expects expeditiously to analyze the comments received, draft a proposed rule, and issue a Notice of Proposed Rulemaking (NPR), with a 30-day comment period. We appreciate your efforts to combat high and volatile gasoline prices, and we will keep you apprised of significant developments throughout the Rulemaking process.

The learning that will accompany the ANPRINPR process is crucial. The Commission has not previously sought to develop a legal definition of the term "manipulation" or prosecuted a case alleging manipulation. Moreover, there are challenges involved in appropriately applying this broad concept to markets that, unlike electricity or natural gas, are not subject to comprehensive regulatory, disclosure, or reporting regimes. The pursuit of a case alleging manipulation in wholesale markets for crude oil, gasoline, or distillates may encounter other complexities arising from the differences between such products and the other markets in which manipulation cases have been brought, but we hope to overcome those challenges as we avail ourselves of the methods and opportunities contemplated by the ANPR/NPR procedures. Specifically, we believe that there is no better way to generate meaningful comments that will assist in our development of a workable rule for the benefit of the American public.

Enclosed please find a copy of the ANPR which we expect to be published in the Federal Register on Monday, May 5, 2008. The Commission greatly appreciates your interest in this topic. Please feel free to contact Chairman Kovacic at any time with any additional questions or comments, or have your staff call Jeanne Bumpus, the Director of our Office of Congressional Relations, at (202) 326-2195.

Sincerely,

William E. Kovacic
Chairman

Pamela Jones Harbour
Commissioner

Jon Leibowitz
Commissioner

J. Thomas Rosch
Commissioner

Letter from Speaker Pelosi, Democratic leaders and chairmen to FTC:
https://speaker.gov/newsroom/pressreleases?id=0628