Those of you who read my column know I’m fond of encouraging our readers to take break from their busy schedules and fire off an occasional e-mail to their elected officials in Congress. This is one of those times.
By now, it should be painfully obvious to even the most dim-witted observer that fuel prices are a crucial – perhaps the crucial – lynchpin in our country’s overall economic health. As we’ve all seen first hand, if fuel prices rise sharply, then everything from the food we buy in the grocery store and the services you provide your customers to the amount of discretionary income we have to keep our economic furnace burning, is affected as well.
Many of the factors affecting fuel prices are beyond our control. But one factor is not. It’s called the “Enron Loophole” and it’s definitely worth a quick Internet search on your part. How the loophole actually works in our market today is fairly complicated. But the basic situation is this: In 2000, the federal government essentially handed over control of our nation’s energy markets to the very people running companies and competing in that marketplace.
A key provision of both the Enron Loophole and the similar “Swaps Loophole” is they allow “institutional investors,” (those would be “insider commodity investors” to you and me) to avoid any limits on the amount of money they invest in the energy market. They can buy all the oil commodities they like, and sit on them as long as they want until they’re ready to sell. The result: Choreographed rolling blackouts across the western U.S. a few years ago and gasoline prices that have jumped 30 percent in the last year alone.
Some experts say the price of a gallon of gas would drop 30 percent to 50 percent overnight if these loopholes were closed. Others say there would be no affect on the cost of gas at all. But, it seems clear to me that the Enron and Swaps loopholes aren’t helping matters as we all struggle in this economy.
Call your congressmen and ask them to shut down aggressive commodities trading in our energy markets. Maybe doing so will buy us some time to shift to more a more fuel-efficient economy and better prepare for high gas prices in the future.
