“The people who are involved in this
are doing really good work,” said Beutel. “They are trying desperately to prevent these huge investors and investment funds from swamping the commodity and destroying a number of end-user businesses. How do you afford margins in a market that’s moving so much faster and makes so much less sense? How do you lock in your supplies or hedge your demand when you have people that are looking at the euro or equities or the lat- est piece of economic data and couldn’t care less whether you got 30 million bar- rels more than you had a year ago. It becomes very difficult. This is absolutely very necessary and needed work and I support (the reforms) wholeheartedly. I have never before been a supportor of regulation and probably never will be again, but in this case it is vital.” However, the Act continues to face tremendous headwinds from the finan-
cial lobby as it enters the rulemaking process. Dicker is less than assured of the outcome. “I don’t think it can hap- pen, “he said. “I’ve seen the process start in July and I’ve seen proposals that look very tough but I saw on Reuters the other day that they are not even going to look at position limits until 2012. They’re not even going to look because they’ve just gotten buried and they can’t get anything approved. They know it. They say they’re going to wait for swaps reportage in the third quarter of 2011 and that’s really kicking the can down the road because the leg- islation basically said you had to have the rules in place by the end of this month for energy. It’s disheartening.” Greenberger is a bit more positive,
though we might have to face another price crisis (perhaps the current one) to push it over the edge. “I fully expect that if gasoline goes over $4 you’re
going to see a repeat of what happened in the summer of 2008 where the American public is going to demand results, and I think the there is a strong likelihood that there will be a push in Congress and possibly from the Obama administration to impose position lim- its,” he said. “In the summer of 2008 it was the threat of speculative limits that drove prices down. I don’t think the threats are going to be enough this time, and I think that if gasoline is over $4, and maybe even approaching $5, as the next election season comes up that incumbents will be in danger, and at that point, they will know that the only thing they can do is drive the specula- tion down.At that point, it will not just be increasing the price people have to pay for gas, but it may break the back of the recovery and all incumbents will be in problem situations whether they are Republicans or Democrats.”
www.npnweb.com NPN Magazine
MARCH 2011 21
