Courtney unveils plan of attack for rising fuel costs
By Melanie Savage - Staff Writer
Region - posted Tue., May. 3, 2011
With gas prices firmly over the $4 threshold and rapidly rising, everyone feels the pinch. U.S. Rep. Joe Courtney (D-2nd District) has been pushing for measures that will reign in rapidly-escalating gas prices.
As a member of the House Agriculture Committee, Courtney chose a local farm as his location for unveiling a three-pronged approach to tackle the problem. According to a media advisory, Hytone Farm in Coventry is “one of many eastern Connecticut businesses that have been severely impacted by rising fuel prices.”
Appearing at Hytone along with Courtney on April 28 were Gene Guilford, director of the Independent Connecticut Petroleum Association; Frank Gerlando, owner of eGen, a Groton-based company specializing in the generation of hydro-electricity; Greg Peracchio, one of the owners of Hytone Farm; Paul Miller, owner of Fairview Farm in Woodstock; and Oz Griebel, CEO of Metro Hartford Alliance.
Courtney’s plan to reduce gas prices includes: reining in speculators, increasing responsible domestic production and boosting long-term green energy.
"With sharp increases in gas prices over the past few weeks, we are heading to an uncharted territory, where the cost of fuel threatens our entire economic recovery," said Courtney. "As our nation tackles this growing problem, we must be clear that there are no 'silver bullets' that will fix all our energy challenges overnight. However, there are steps we can – and must – take now, like reining in the speculators who account for as much as $27 of the cost of each barrel of oil. Ultimately, our response needs to be comprehensive and forward-looking."
According to a 2008 report, the percentage of speculators in the oil market has increased 16 percent, to more than 57 percent of traders between 1998 and 2008, and has only grown since then. That increased presence has led to volatility in the markets and price increases for consumers. “These are largely people who have no intention of actually taking control of the commodities,” said Guilford. Trading by non-commercial market players such as investment banks and hedge funds is partially responsible for changes that mean “3.5 million dollars a day in increased costs” for Connecticut businesses and consumers since February, said Guilford.
The Financial Services Reform Bill, passed in 2010, calls for limits in the degree to which non-commercial interests can trade in fuel, some precious metals and agricultural commodities such as feed grains. “This would restrain them from being able to plow money into the markets and driving costs up,” said Guilford. The U.S. Commodity Futures Trading Commission was originally supposed to have finalized regulations for enacting the bill by February of 2011. The new date for regulations, according to Courtney, is September of this year.
Guilford believes the bill will have a dramatically positive impact upon consumers. “When the Federal Reserve Chair spoke recently, the price of gas went up immediately by eight cents a gallon wholesale, six cents in Connecticut,” he said. “Nothing else changed. Prices can change quickly and dramatically.”
Courtney supports green-energy initiatives such as that represented by Groton-based eGen. EGen has developed a technology to harvest energy from slow-moving, shallow bodies of water. “Green energy is vital for the economy because it keeps money here in this country,” said Courtney. He also supports legislation to provide tax breaks and incentives for the development of natural gas vehicles, fueling stations and other infrastructure to expand the use of this domestic fuel alternative with lower emissions.
According to owner Ned Ellis, Mapleleaf Farm utilizes approximately 18,000 gallons of diesel fuel a year. “When it goes up $1 or $1.50 a gallon, it makes a big difference,” he said. Higher fuel costs also affect surcharges on feed, seed and other commodities utilized by the farm. “Even the cost of the feed produced on the farm is affected,” said Ellis.
Last year, Hytone spent approximately $25,000 on diesel fuel. If prices continue to increase, that cost could double for 2011. Currently utilizing about $1,000 of electricity per month, Hytone fared favorably during past energy audits. “There were small things we could change here or there,” said Peracchio, “but for the most part we were running very efficiently. There’s just not that much further we can go. The rest of it, we have no control over.”