Attention All Pilots: A Chance to be Heard!

[blueridge71]

Now AOPA is plugging this site as well.

Here is my letter to Congress:

AOPA and the airlines are barking up the wrong tree by attacking commodities traders. IF speculation is actually driving prices up, it is only a symptom of the problem of supply and demand.

There is too much demand and we don't access the supplies that we have thanks to special interest groups. We need to start drilling and building more nuclear power plants immediately. We have only built one refinery since the 1970s and 90% of our domestic offshore oil reserves (billions, if not trillions, of barrels) are off limits.

Government regulation and environmental special interests are to blame for much of our distress. Thirty years of mismanagement cannot be overturned with a bill attacking "evil capitalists."

An immutable law of supply and demand is that as demand increases, the price increases. The only ways to reduce price are by either reducing demand or increasing supply. That is where we should be focusing our efforts.

 

[Superpilot92]

[FONT=verdana,geneva]On several occasions in the past few months, I have written about the impact of skyrocketing fuel prices on airline customers – in their daily lives and when they travel (Final Approach May 1 and Final Approach May 28 ). In the long run, to lower oil prices for all Americans, we need to increase domestic supply, increase exploration, alternative energy sources and conservation. However, one near-term solution to the problem is for government to investigate and rein in oil speculators.

What is the Commodities Market? – Commodities are raw materials purchased by manufacturers of finished products such as food manufacturers, oil refiners or builders. Businesses that are highly dependent on oil – refineries, heating oil dealers, airlines and trucking companies among others – lessen their risk of significant price fluctuations by purchasing future delivery contracts at predetermined prices in what is known as the commodities or futures markets. The two largest U.S. commodities markets or futures exchanges are the Chicago Mercantile Exchange and the New York Mercantile Exchange, where people trade standardized futures contracts; that is, a contract to buy specific quantities of a commodity at a specified price with delivery set at a specified time in the future.

What is the Problem with Oil? – There is a significant disconnect between the paper market for oil (speculators) and the physical market for oil (consumers). In recent years, speculators have taken advantage of actual consumers of oil by bidding up the price for futures contracts. If a speculator purchases a contract for delivery of oil at a high price six or 12 months in the future but has no intention of actually taking delivery of the oil in that contract, then a physical customer who needs that oil – to deliver home heating oil, to operate trucks or airplanes, or even to process in a refinery – will be forced to pay the higher price in order to obtain the oil that is needed.

How Do They Get Away with That? – Increasingly, sophisticated institutional investors have managed to manipulate the rules and regulations governing commodities transactions through a series of exemptions and waivers, including the so-called “Enron loophole,” low margin requirements and the dodging of U.S. public disclosure requirements. These complex arrangements have a similar impact: They put people engaged in oil-related businesses at a disadvantage with those who gamble relatively small sums that the price of oil will increase out of proportion to marketplace demands. If that happens, as it has regularly over the past few years, those who need oil for their businesses pay a premium, which is passed on to you – the consumer.

What Can Government Do Now? – In the near term, Congress needs to address the impact of unchecked speculation in the commodities market.

Commodities trading is overseen by a small, but very powerful government agency known as the Commodities Futures Trading Commission (CFTC) . Congress can require the CFTC to implement a host of controls such as imposing limits on the quantity of commodities contracts speculators may purchase, closing the loopholes that allow speculators to trade exempt from any government oversight or regulation, and requiring reporting by those who are engaging in speculation.

Experts say that closing regulatory loopholes in the trading of commodity futures will result in a significant reduction in fuel prices.

What’s Next? – Congress is expected to debate some of these issues in the next few weeks and it is urgent that they hear your voice. To facilitate public participation in the debate over speculators, we have launched a broad-based coalition, S.O.S. NOW, that provides a wide array of information on speculation and its impact on the price we all pay for oil. S.O.S. NOW stands for Stop Oil Speculation Now, and we urge you to go to the Web site www.stopoilspeculationnow.com and send a message to Congress about oil speculation.[/FONT]
[FONT=verdana,geneva]Sincerely,[/FONT]

[FONT=verdana,geneva]James C. May
President and CEO
Air Transport Association
[/FONT]

 

[JumpJetter]

or try signing this petition.

http://www.americansolutions.com/default.aspx

 

[Superpilot92]

Some Very Good Points In This !!!

Steenland Cites Oil Speculation in Thursday’s Erratic Closing Markets

Northwest Airlines President and CEO Doug Steenland criticized financial speculation in light of today’s rapid run-up in oil prices in the final hour of trading and said, “If anybody needed any further evidence that the oil markets are being directly influenced and affected by financial speculation, today’s result ends that debate.”

He added, “With no single event occurring that would cause supply to decrease or demand for oil to increase, the price in the last 20 minutes of trading went up about $5 a barrel as a result of financial players, near the close of trading, coming into the market and driving up price.”

Steenland, who is also the Chairman of the Board of the Air Transport Association, recently testified in Congress on this issue, and added, “Today’s result is the poster child of why Congress needs to take immediate action to change the law and stop these abuses from adversely affecting the U.S. economy and consumers.”

Over the last year, the price of crude oil has more than doubled. To help fix these unprecedented oil challenges, Steenland favors increasing domestic supply, further oil exploration in the United States, investing in alternative energy sources, and conservation.

 

[blueridge71]

The cumulative effect of anti-speculating legislation will be to waste time. It may eventually lead to a leftist push to nationalize the oil companies, a goal that some Democrats are already talking about.

I predict little noticeable change in the price of oil if this legislation passes.

 

[Freeze_gopher]

Blueridge, you're gonna need to back that up with some facts or at least reason. Sound bites and poorly thought out platitudes just don't cut it. Show us how we become leftists by stopping Investment banks from exploiting our economy. Define leftist for me while you're at it.

 

[Soverytired]

The cumulative effect of anti-speculating legislation will be to waste time. It may eventually lead to a leftist push to nationalize the oil companies, a goal that some Democrats are already talking about.

I predict little noticeable change in the price of oil if this legislation passes.

There's no way the party in power (the Democrats) are going to pass ANYTHING before the November elections. If they did, they'd have to vote on proposed amendments on things like drilling for oil, which they've repeatedly have said they'd vote down.

This sort of nuanced prattle doesn't go over well with an electorate pissed at $5.00 gallon gas. So . . they'll punt it down the road, much like both parties have done since the 70's.

 

[Freeze_gopher]

Soverytired,

I agree that neither side of the isle gets a pass on this issue. However, there is legislation (that is being fast tracked) that may or may not come to a vote prior to the election. Politicians do like the status quo, but there is enough of a ground swell over this issue that they may actually do something about it. What a novel concept.
I have to imagine that a lot of pressure is being felt by both the Executive and the Legislative branches to change the irrational position held by the CFTC that the Intercontinental exchange is an overseas OTC market. ICE is based in Atlanta, is an American Company, run by an American. The CFTC contends that ICE isn't an American exchange because they bought a small British exchange several years ago. Hence they are not held accountable to American reporting requirements.

 

[Freeze_gopher]

The cumulative effect of anti-speculating legislation will be to waste time. It may eventually lead to a leftist push to nationalize the oil companies, a goal that some Democrats are already talking about.

I predict little noticeable change in the price of oil if this legislation passes.

Blueridge, you're gonna need to back that up with some facts or at least reason. Sound bites and poorly thought out platitudes just don't cut it. Show us how we become leftists by stopping Investment banks from exploiting our economy. Define leftist for me while you're at it.