Oil speculators, not a lack of domestic drilling, are to blame for the nation's rising gas prices, the top House Democrat argued Wednesday.
House Minority Leader Nancy Pelosi said unscrupulous Wall Street investors have artificially inflated prices at the pump, which are climbing toward $4 per gallon.
The California Democrat called on Congress to take "strong action" to rein in the allegedly excessive speculation, and accused Republicans of protecting Wall Street profits at the expense of consumers.
The comments — arriving a day before President Obama is scheduled to address the issue of rising gas prices in Miami — represent just the latest shot in the perennial debate over the cause of price fluctuations in the oil and gasoline markets.
Regular gasoline prices are averaging $3.58 per gallon and have risen almost 20 cents in the last month, according to AAA.
While many Republicans push more domestic drilling, Pelosi and other Democrats have long argued that speculative Wall Street trading in energy markets has pushed oil and gasoline prices far above what supply-and-demand fundamentals should dictate.
The 2010 Dodd-Frank financial reform law included a suite of provisions to expand federal oversight of the trading, including new “position limits” for traders that the Commodity Futures Trading Commission (CFTC) finalized late last year.
But Drew Hammill, a spokesman for Pelosi, said Republicans have blocked the funding needed for adequate CFTC oversight, noting that the current-year funding of $205 million is not enough to meet the agency’s increased responsibilities. President Obama’s recent fiscal year 2013 budget plan seeks $308 million for the agency.
“While the Republicans have introduced, but not been able to enact, bills that would overturn or delay Dodd-Frank, strangling oversight is their new method to protect Wall Street speculators,” Hammill said in an email.
Republican leaders have rejected that argument, saying the Democrats' resistance to wholesale energy exploration is driving up the price of fuel.
Obama's recent rejection of the Keystone XL oil sands pipeline, they argue, is just the latest evidence that the White House is prioritizing the concerns of environmentalists over the production of fuel.
GOP presidential contender Newt Gingrich recently hammered the president for having an "outrageously anti-American" energy policy, while Rick Santorum, another Republican hopeful, blamed Obama's “radical environmentalist policies” for the rising costs.
Some Democrats are also urging President Obama to consider releasing oil from the country's emergency stockpiles in order to lower gas prices.
The White House, for its part, points out that oil production has risen in recent years. Administration officials are also touting plans to expand offshore oil-and-gas leasing.
But the administration proposal, which focuses on Gulf of Mexico regions where development is already centered and more Alaskan leasing, is not nearly as expansive as many Republicans would like.
The House cleared GOP legislation last week that would mandate far wider leasing by opening up areas off the Atlantic and Pacific coasts, and would also allow drilling in the onshore Arctic National Wildlife Refuge in Alaska and green-light construction of the Keystone pipeline.