Small businesses also face significant burdens from high gas prices with increasing costs to ship products. A Small Business Administration report from 2008 found that small businesses, compared with larger businesses, have significantly higher costs for energy in the commercial and manufacturing sectors. These high costs hurt our economic recovery by stifling new hiring.
We should do everything we can to curb high gas prices now, prevent high gas prices in the future and work to minimize the impact of gas prices on our economy.
First, we must invest in energy production here at home and stop sending billions of dollars to the Middle East each year. From coal to nuclear, oil to wind, natural gas to hydrogen, we need to responsibly pursue every resource in order to be energy independent. We should start developing new energy sources now in order to provide affordable energy in the future. That’s why I support the Keystone XL oil pipeline, which would help create jobs, in addition to helping us become energy-independent.
One of the keys to our long-term economic security is achieving energy independence, but American families need relief now. Research has shown that it is not the fundamentals of supply and demand that are causing the most recent round of pain at the pump. In fact, the supply of oil is up and demand is down. According to the Energy Information Administration, the supply of oil is higher than it was three years ago, and demand is at the lowest level since 1997. We can slow the rising cost of gasoline in part by addressing speculation.
Multiple reports, including from the American Trucking Association, Delta Airlines and the Petroleum Marketers Association of America, have found that excessive oil speculation significantly increases the price of oil and gasoline. According to a recent article in Forbes, which pointed to data from a Goldman Sachs report, excessive oil speculation currently adds an additional $0.56 per gallon to the price of gasoline. It is unacceptable that Wall Street speculators are driving up the price of oil, forcing Americans to pay more at the pump.
We need to take immediate action to rein in oil speculation and ensure that Americans aren’t being cheated. That’s why my colleagues and I recently sent a letter to the Chairman and Commissioners of the Commodity Futures Trading Commission (CFTC) asking them to limit oil speculation and stop allowing Wall Street speculators to drive up the price of oil, harming American families and small businesses. The Wall Street Reform and Consumer Protection Act of 2010, which I supported, required the CFTC to enact strong position limits to eliminate excessive oil speculation by January 2011, but it has yet to see these limits enforced in the market.
We should consider every good idea on the table to lower prices now and prevent them from rising in the future. The stakes are too high for middle-class families and small businesses. We must commit to ensuring that our nation has more stable energy prices through greater domestic production and by cracking down on speculation.
Rep. Donnelly (D-Ind.) is a member of the House Committee on Financial Services.