Prohibitions On Market Manipulation and False Information in Subtitle B of the Energy Independence and Security Act of 2007 #535819-00070

Submission Number:
Kevin Egan
Initiative Name:
Prohibitions On Market Manipulation and False Information in Subtitle B of the Energy Independence and Security Act of 2007
RE: Market Manipulation Rulemaking, P082900 In my opinion, I would like to see additional language added to this law reflecting the following two opinions: 1. Trading in the futures or spot markets for energy commodities should be regulated and limited to only those individuals or institutions that have the necessary equipment and facilities to take physical delivery and storage of the commodity being traded for further use within the supply chain of that commodity. Our country is far too dependent upon petroleum based derivatives to allow individuals to artificially and unnecessarily effect prices for the sole purpose of personal monetary gain through a speculative investment. I am a full believer in capitalism on a normal basis, however, as I will later illustrate, oil is not subject to the normal laws of supply and demand and should be treated as such. 2. A distributor of gasoline and diesel fuel should be required to directly associate the selling price of that good on a LIFO cost basis. Gas stations should not be permitted to raise the cost of fuel at the pump to consumers due to immediate market news or sentiment that effects the price of oil they will not take delivery of as refined gasoline or diesel fuel until that physical cost is realized. --- It is well known that the United States dependence on oil and gasoline is unlike any other commodity or product available today. Our entire way of life is dependent upon the consumption and use of oil for almost everything we do. Almost every good that is brought to market, every industry producing a good or service, and every homeowner is affected by the use of petroleum in one way or another. As such, oil and petroleum based derivatives such as gasoline and diesel fuel are not subject to the normal laws of supply and demand. For example, if the cost of eggs doubles over a short time period there are several alternatives for the average citizen to pursue. One, they may purchase an alternate source of protein such as meat or pork, two, they may choose to simply not purchase the eggs at all. In exercising either of these two (or other) options, the demand for eggs would reduce causing the relative supply of eggs to increase until the price of eggs was seen as “reasonable” in the eyes of a consumer and they would again purchase the eggs. However, oil is not subject to the normal influence of supply and demand. What alternative does the average citizen have to travel 20 or more miles to work besides a petroleum based vehicle? What alternative does you’re average citizen have to travel to the grocery store or to seek medical care which may be located several miles away? Even if an alternative source of transportation was found by the average citizen, the goods that are in the grocery store for purchase were delivered to that store, no doubt by an 18-wheeler trailer powered by diesel fuel which can substantially effect the price of the goods within the store.