(Host) Congressman Peter Welch is backing an energy plan that industry officials say could reduce fuel prices by about a dollar a gallon.
But Welch says the proposal faces an uphill battle in Congress.
VPRs Bob Kinzel reports:
(Kinzel) Back in 2001, Congress passed a law-known as the Enron loophole-that essentially deregulated the energy futures market.
It allowed the price of petroleum to be traded as a commodity that could be influenced more by hedge fund speculation than the supply and demand of the oil market.
Welch wants to rescind the loophole and restore federal regulations to the energy market:
(Welch) "When it became deregulated at the request of Enron it allowed secrecy it allowed hedge funds getting an iron grip on the market to impose a speculation premium that everyone of us is paying and frankly I think it’s outrageous that government isn’t on the side of the average family and is standing by when oil companies are making record profits."
Matt Cota is the executive director of the Vermont Fuel Dealers Association. He strongly supports the elimination of the Enron loophole and says taking this action could significantly reduce gas and heating oil prices. Cota says there’s no reason why oil should be selling at its current level of roughly $110 a barrel:
(Cota) "We should be at $60 to $70 a barrel that’s the going rate that’s the right price based on all the historical data so what’s changed? Wall Street, the Enron loophole, the ability to make these financial transactions that bid up the price of oil that’s making somebody a lot of money but at the same time it’s bankrupting Main Street.
Cota says next year’s Farm bill contains a provision to re-regulate the energy market but he’s concerned that differences on agricultural policies between the Senate and the House will doom this legislation:
(Cota) "We need it now and people need to realize this is a complex story this is a complex issue these financial transactions that go on very few people really understand what’s happening at this level and that’s why they’ve been able to get away with it for so long but sooner or later fear has got to take over and this greed has to subside."
The second part of Congressman Welch’s plan calls on the Bush Administration to temporarily stop sending oil into the nation’s strategic oil reserve. Welch says this effort will send more oil into the domestic market and could lower prices by as much as 25 cents a gallon:
(Welch) "You lower that price by 25 cents it has a real impact you get ten gallons of gas you save two fifty that’s real money for folks these days but it has a real impact on some of our small businesses that are getting clobbered by these rising energy prices."
Welch says it’s critical to act on these proposals now because some energy officials are predicting that gas will cost four dollars a gallon by the middle of the summer.
For VPR News I’m Bob Kinzel in Montpelier.