U.S. to investigate energy markets for possible gas price manipulation
With gas prices rising nationwide, the Obama administration said it will investigate the energy markets for any evidence of manipulation of oil and gas prices.
With the average price of a gallon of gas at about $3.84 nationally this week, almost a dollar higher than a year ago, the U.S. Attorney General’s office formed the Oil and Gas Price Fraud Working Group to root out cases of fraud and collusion, as well as price manipulation.
“We are going to make sure that no one is taking advantage of the American people for their own short-term gain,” President Obama said Thursday at a town hall meeting in Nevada.
The group will consist of representatives from nine federal organizations including the Justice, Treasury, Agriculture and Energy departments, the Federal Trade Commission, the Federal Reserve Board and the Securities and Exchange Commission. Each will have its normal investigative powers, a Justice Department spokeswoman said.
The group’s formation comes as the Obama administration faces more pressure to combat soaring gas prices. Last week, a group of 17 Democrats sent the president a letter urging him to release oil from the federal Strategic Petroleum Reserve, citing the continued unrest in the Middle East and North Africa.
The group called the reserve “the only tool we possess which can counter supply disruptions and combat crippling price spikes in the short term.”
However, Obama has been reluctant to tap the reserve, saying it is available only for emergencies.
Laurel M. Harbridge, a Northwestern University political science professor, said the formation of the investigative group is a way for the president to take control of the situation without taking more extreme steps.
Creating the group “kind of turns the high gas prices into something that he’s combating and he’s against, rather than either a problem that can’t be dealt with or something that’s due to domestic policy decisions,” Harbridge said.
Energy experts said the likelihood that corruption in the oil and gas markets is a major factor in rising gas prices is low, though the possibility exists.
“Forming the group is probably not a bad thing, but I don’t expect it to turn up more than would have come up in any normal case,” said David Pumphrey, deputy director of the energy and national security program at the Center for Strategic and International Studies in Washington.
“I think the run-up at the pump pretty clearly and closely tracks the run-up we’ve seen in crude oil prices worldwide,” he said.
