As some of you may know, I have no problem writing Senators, Congressmen, whom ever.. I dont really try to be a pain, but on issues of imigration, and gas, I have become one. I am normally a Republican, but will pass respect to anyone who I believe deserves it, and I must admit, I dont always agree with Mr Levin, but he has always spent the time to return any contact I have made with him.. This was his last letter to me. Thought I would share it.

Dear Mr. Franks:


I want to share with you a speech I gave in the Senate today regarding soaring energy prices. Record high gas and diesel prices have reverberated throughout our economy, hitting the pocketbooks of ordinary Americans and inflating the price of everything from food to manufactured goods. Action is clearly needed to combat these skyrocketing energy prices which are a threat to our economic and national security.

During the past few years, both as Chairman and as Ranking Member and of the Senate Permanent Subcommittee on Investigations (PSI), I have led a number of investigations examining U.S. energy markets and rapidly rising oil and gasoline prices. As a result of these investigations, I have been advocating a number of measures to address the rampant speculation and lack of regulation of energy markets, which have greatly contributed to the recent run-up in fuel prices. Four specific policies should be immediately adopted to combat the absurd prices Americans are paying at the pump. These policies are contained in the Consumer-First Energy Act of 2008 (S.2991), which was introduced by Senator Harry Reid (D-NV) on May 7, 2008. I am an original cosponsor of this important legislation.

First, we need to put a cop back on the beat in all energy markets that affect the U.S. in order to prevent the excessive speculation and price manipulation that drives up the price of a barrel of oil. The trading of contracts for the future delivery of oil and gas has increased six-fold since 2001. Much of this increase can be attributed to speculators, who buy and sell futures contracts for crude oil and leverage them just to make a profit, creating an artificial “paper demand” that does not accurately reflect actual market conditions. While the Commodity Futures Trading Commission (CFTC), the main federal regulator charged with policing U.S. energy commodity markets, has the authority to regulate certain commodity markets, it cannot police one of the biggest energy markets due to the “Enron loophole,” a provision in law that exempts electronic energy exchanges from government oversight. In September 2007, I introduced legislation (S.2058) that would close the Enron loophole and regulate electronic energy markets. In December 2007, I was able to successfully work with my colleagues to insert language from S.2058 into the Farm Bill that was passed by the Senate on December 14, 2007 (H.R.2419). Last week, the House and Senate conferees on the Farm Bill reached agreement to include our legislation in the final Farm Bill. I am hopeful that Congress will finally pass this important legislation – and the President will sign it – shortly.

The Consumer-First Energy Act contains a provision to close another loophole in the regulation of our energy markets. One of the key energy commodity markets for U.S. crude oil, gasoline, and heating oil is now located in London, outside the reach of U.S. regulators. This means that traders can avoid our government’s limits on speculation and reporting requirements by using the London exchange. The Consumer-First Energy Act includes a provision to stop rampant speculation and increase our access to timely and important trading information and ensure that there is adequate market oversight of the trading of U.S. energy commodities no matter where the trading occurs. This provision is so important that I have introduced this provision as a separate bill, S. 2995.

Another policy that should be implemented to help alleviate some of the upward pressure on oil prices is the suspension of the filling of the Strategic Petroleum Reserve (SPR). In 2003, the Permanent Subcommittee on Investigations released a report showing that the Bush Administration’s policy of placing large deposits of oil into the SPR was increasing prices but not overall U.S. energy security. For the past few years, over repeated objections from its own experts at the Department of Energy (DOE), the Administration has continued to fill the SPR regardless of the price of oil or market conditions. Given the fact that the SPR is more than 95 percent full, it makes little sense to be filling the SPR when the price of a barrel of oil is hitting record highs on a daily basis. That is why I have co-sponsored a bill (S.2598) to suspend the SPR fill for one year, or until prices fall to more acceptable levels, whichever comes first. Passing this legislation will save the taxpayers money and relieve some of the pressure on the oil markets that is driving prices relentlessly higher.

While closing the Enron loophole and temporarily stopping the filling of the SPR will help lower energy prices in the near-term, we need to develop a long-term, comprehensive energy plan to decrease our reliance on oil. By investing in new technologies and alternative energy sources, we will significantly reduce our dependence on foreign oil. I have long been a supporter of advanced automotive technologies such as hybrid electric, advanced batteries, hydrogen and fuel cells and promoted development of these technologies through federal research and development and through joint government-industry partnerships. The federal government must do its part first to develop these technologies so that they will then in turn be within reach of the American public.

Finally, while the American consumer is increasingly burdened by record prices at the pump, major oil companies have been reporting record-breaking profits. Instead of utilizing these windfall profits to develop new technologies or boost production, these companies have been buying back shares to inflate their earnings and reap further profits. I have supported windfall profits taxes in the past, and I will continue to support them in order to encourage the sensible use of oil company resources.

These four common sense policies could do a great deal to lower energy prices and alleviate some of the pressure the average American is feeling in this difficult economy. If you would like to learn more about the Consumer-First Energy Act, or view my statement on actions we should take to lower oil and gas prices, I encourage you to click on the following link <http://levin.senate.gov/newsroom/release.cfm?id=297663>.

Sincerely,
Carl Levin

 

Very informative Pat, thank you for taking the time to write, and post the replies you have recieved.

 

I found that very interesting and informative. Maybe some of this legislation will come about.

 

I agree with everything but the windfall taxes. Oil companies already pay a very high tax rate, and that is always passed on to the consumer. Additional taxes will once again be passed to the consumer, so that won't help.

Now if we can somehow break up OPEC.......

 

As a general rule that you can pretty much bank on, anything that Harry Reid sponsors or endorses can be put into one of two sub-categories; 1) socialism/communism or 2) grandstanding to garner the attention of the extreme left.

Those two are sub-categories of a bigger heading entitled Really Bad Ideas that the Democrats have not thought out how they will negatively effect the "ordinary Americans".

I would like to see him try enact the exact same legislation on something that isn't so much in the public eye, like say green bean futures or orange juice futures and see how the Farmers would react to that bit of legislation.

That being said, thank you Pat for taking the time out to type that response up. It goes to re-enforce my thoughts on the ridiculous things that the politicians will do to placate the public and draw attention to the wrong issues and focus on phoney solutions to problems instead of the true issues at hand.

 

The bumper sticker on the top of my slider says:

Harry Reid Does Not Speak for this Nevadan

and just below it I have another that says:

OK Nevada, So Who Stole Harry Reid's Huevos?

Carl Levin and Harry Reid: a marriage made in Moscow! Friggin' losers...

 

Curtis, I agree, if Windfall tax actually did what people wanted it to do, it would be great!! It just dont work that way. I guess you can liken it to the law, if ya got a good enough lawyer, it dont matter what you do.

Jason, please excuess my ignorance here, what is it you are seeing that I am not.. Other then the Bush Bashing, and the tax, what stands out as a problem..

and last, how would I write that green bean thing

 

I have an idea. Lets stop the oil companies from spending so much money to make their "record breaking" profit. Thus profit will be down and everybody will be happy? Another thing. Maybe we should start implementing some of the stuff in "Das Kapital" and stop this profit crap. We should all work for the betterment of the state like the USSR used to do till it collapsed.

 

Okay, again, sorry, if that is in my direction, if I read this right, there would have been taxes if they didnt spend their money on other then fossil fuel testing, if they sepnd it on testing, there wouldnt be taxing..

Again guys, please understand, I am truelly trying to educate myself on what is wrong with this proposal.. I am not just trying to be that "deick"

 

Okay Aklim, sorry here, what are you trying to say? If I read everythign correctly, there would be a peanlity ( tax) if further testing wasnt done on fossil fuel alternatives. This tax would be on the record high profits, caused by "projection" or, by sub companies of the oil companies, driving the cost up..
If i understood that right, thsi would have been the same thing Eddie Murphy and Dan Akroyed did in the 80's in what ever that movie was. Which, by law , is illegal ?

Someone help here, a bunch of thoughts running through, but not much in comunication skills on this side of the keyboard.

 

I am saying that if we put congress on to fix anything, it usually gets screwed up more than in the beginning. At least we have the product with higher prices. If we get congress involved, we probably will get higher prices and no product. Congress has done little that we can say has come out good without some other snags that come with their "help"

I am also saying that the "record profits" you keep hearing in the media is causing a scare because they don't tell you how much the oil companies spent to make that money as a percentage. In 1 year they made 40 billion. OTOH, they brought in 404 billion, of which 40 billion is profit. That makes it about an 11% profit margin. Yes the number is big (40 billion), however what they spent to make it is even bigger. Works out to be about 10-12% profit.

 

Very good info pat. Also to be clear the SPR is a drop in the bucket of our fuel issues. And his initial speech is right to a point. The reason for our fuel prices is our lack of fuel refinement. We have not built a refinery since 1979. Our production is at 110%. This causes our refineries to wear out faster than we can expand. Until our refineries are expanded and increased our fuel situation will not change. We can get all the oil we need, we just can't change it to useful fluids.

 

In other divisions, Shell's gas and power unit reported an 18% profit rise, helped both by strong liquefied natural gas prices and increased LNG volumes, and it doubled its profit in its oil sands division to $249 million despite lower volumes and higher costs.
BP upped its dividend by 31% and Shell increased its dividend by 11%.
Steve Goldstein is MarketWatch's London bureau chief.

This was taken from a Markey watch magaizine..

From what I understand, other then the unwillingsness to pump more drums a day, like once done in the 90's-2000, the oil companies are not at fault for the cost, they are raking in the benifits..From, what I am reading, the cause of this price of 120.00+ a barrel, is caused by either false panics (caused by subcompanies of the oil companies) or just very nervose people. It is all based on what might happen, not what has happen..

I look at this, and it drives me nuts. we have over 95% of all our stratigic oil resovoirs full. We should be using these as you would a ballast on your well water pumps.. If the presure drops, you dont notice, the ballast supports it until you can recoup.

We need something to happen, and sorry Aklim. if nopt the Goverment to step in, who??Because I am not up for no grassroots thing right now.. If all i had to do was worry about me getting to and from work, I would ride a bike, but I have to pick up a boy at school, then get a boy form day care ( not much room on the bike ). My trip is 12-15 miles one way, so the purchase of another car wouldnt pay for itself for no less then 18 months ( insurance+tax+upkeep= no need yet ).. So again Who does something??

 

Good point Jkidd, but look at where we are placing it?? SOR, i think that was what he called it. Strategic Oil Resver

 

The question is not whether you do something or somebody does something. The question is whether you can afford for the govt to step in. How many projects have they done without causing a bigger mess. Look at Medicar and Medicaid. On the surface it is fine. Companies are finding it hard to get reimbursement though. Social Security? They are raiding the fund left and right to balance this budget or pay for that. Fuel tax? See above. Like I said, letting the govt solve your problems is going to lead to bigger problems. Best ride it out and let it go where it may. Govt is a short term solution with huge payments at the end. Kinda like a payday loan. Have you really known many things they have done without a bigger mess created?