FTC announces plans to probe oil market

WASHINGTON – The Federal Trade Commission will announce today its plan for investigating and regulating possible market manipulation by oil companies, traders and others, a Democratic senator said Thursday.

Under legislation passed late last year, violators could face fines of $1 million a day.

Sen. Maria Cantwell, D-Wash., said the best way to bring down the price of gasoline at the pump is for the administration to start seriously policing the oil industry.

“The jury is still out on how tough the FTC will be,” Cantwell said in an interview. “We see smoke. We need the FTC to determine whether there is a fire.”

The legislation that Congress approved in December granted the FTC powers to investigate petroleum markets. Cantwell sponsored the legislation and has been the Democratic leader on many energy issues over the past several years.

Last month, she called on the FTC to stop delaying and launch an investigation into oil prices, and more recently she asked the Justice Department to create a special task force to look at whether sky-high crude oil and gasoline prices are the result of market manipulation.

Cantwell said there was no reason for gasoline prices to be up 100 percent in a year and headed for the $4 a gallon mark when there’s been no disruption in supply and U.S. demand has cooled.

Following the 2000-2001 West Coast energy crisis, when electricity prices rose steeply, Congress gave the Federal Energy Regulatory Commission the power to investigate market manipulation in the electricity and natural gas industries, Cantwell said. Since then, FERC has conducted 64 investigations resulting in settlements worth $40 million and has pushed two enforcement actions that netted nearly $460 million in civil penalties.

“It showed there was manipulation in the natural gas and electricity markets, and we want to make sure the oil markets are policed,” Cantwell said. “Consumers want to know the Bush administration will do something.”

The FTC had no immediate comment.

On Capitol Hill, there’s been talk of suspending the 18.4 cents per gallon federal gasoline tax between Memorial Day and Labor Day. The likely Republican presidential nominee, Sen. John McCain of Arizona, first proposed the idea. Democratic presidential candidate Hillary Clinton also supports it.