WASHINGTON, D.C. – Senator Pat Roberts (R-Kan.) today on the Senate floor said high gas prices are not caused by speculation in the commodities markets, and called such recent claims inaccurate.

“We should be finding effective solutions to fix failed federal energy policy, rather than creating blame where it does not exist,” Roberts said. “Political posturing by President Obama and my friends across the aisle does nothing to minimize the pain felt at the pumps.”

In his speech, Senator Roberts explained that gas prices are sky-rocketing because of stricter environmental regulations, restricted federal energy production, increased demand for oil outside the United States, and fear over Iran's nuclear weapons ambitions.

Sen. Roberts’ speech comes after some have blamed the rising prices on the commodity markets. Roberts is Ranking Member of the Senate Committee on Agriculture Nutrition and Forestry which has jurisdiction over the Commodities Futures Trading Commission (CFTC) which regulates commodities markets.

You can click here to watch his speech.

The following is the complete text of his prepared remarks:

Mr. President, I rise today to address the inaccurate claims made by a number of my friends on the other side of the aisle regarding speculation in the commodities markets.

From the rural farmer, to the urban commuter, Americans everywhere are deeply impacted by high gas prices.

Unfortunately for them, political posturing by President Obama and my Democratic friends does nothing to minimize the pain felt at the pumps.

Mr. President, like the annual planting and harvesting seasons in Kansas,  a yearly occurrence here in Washington, D.C. is for  certain members of Congress to blame the commodity markets every time a particular commodity reaches an uncomfortable price level.

Unfortunately, this populist rhetoric fails to acknowledge that everyone’s money is the same color in the futures market. For every buyer there is a seller and for every seller there is a buyer.

The historical problem for futures markets and the hedgers who use them is that often times, particularly in the deferred month contracts, there is not the liquidity or an adequate number of market participants to take the other side of a trade to allow hedgers to manage their deferred price risk.

Market participants who provide this liquidity provide a valuable tool that allows producers and consumers of products to lock in their inventories well in advance, which can lead to lower costs to producers and better prices for consumers.

If long speculation and the liquidity it provides is artificially driven from the market, the potential short-term advantage of lower prices could lead to production shortages, higher demand and even higher prices for both energy and agricultural commodities.

Speculation is not manipulation, Mr. President. Speculation is trading to make a profit from anticipated price changes – either higher or lower. Manipulation is intentionally acting to cause artificial price changes.

As explained by the Commodities Futures Trading Commission, the independent regulatory arbiter of excessive speculation, speculation is excessive when it causes any sudden or unreasonable fluctuations or unwarranted changes in the price of a commodity.

In fact, the CFTC currently has the authority to regulate against price manipulation and it has had this authority since its creation by Congress in 1974.

Furthermore, we have experts at clearinghouses, at the National Futures Association and at the CFTC whose job it is to watch these markets minute by minute, hour by hour and day by day to assure that the discovery of prices between buyers and sellers is occurring openly and transparently.

Yet, when prices just so happen to move above what some in this body might deem a politically uncomfortable level, we blame the participants in the market rather than the multitude of factors and economic variables these market participants react to each minute the market is trading.

Let’s examine some of these factors, shall we?

First off, increased demand outside of the U.S., particularly in Asia, has caused the price of oil to rise.

Even with increased production in Canada, the United States and Brazil, declines in the North Sea, Mexico, Sudan and Libya have impacted global supply.

Second, U.S. refining capacity has decreased as a result of stricter environmental regulations, which has lowered the supply of gasoline enough to prop up prices.

Third, restricted domestic energy development on federal lands has disrupted futures projections.

Fourth, fear over Iran's nuclear weapons ambitions is leading to increasing demand for gasoline, as people try to stock up in anticipation of future supply disruptions based upon the possibility of a real military conflict in the Middle East.

Lastly, blaming speculators ignores the inflationary aspects of the monetary policies of several Central Banks around the globe.

It doesn’t take a speculator to know that when the U.S. Treasury prints more money it drives down the value of the dollar and drives up the price of raw materials and commodities, like oil, priced in dollars.

Yet, despite these facts, my friends on the other side keep seeking a solution for a problem that isn’t there. 

So what have the regulatory bodies found in their investigations? Wait!? 

There have already been studies and investigations into whether excessive speculation is manipulating prices?  That’s right.  Now let’s take a look at what they found.

Last year, a Federal Trade Commission report on manipulation of gas prices determined that none of the complaints investigated violated FTC rules. 

A similar study by the CFTC stated that its preliminary analysis, and I quote, “does not support the proposition that speculative activity has systematically driven changes in oil prices.”

Last but not least, the administration’s own “Financial Fraud Enforcement Task Force” set out to investigate “illegal speculation” in energy markets.  Has it found any?  No.

Mr. President, the effects of high gas prices on economic growth are well understood.

We should be finding effective solutions to fix failed federal energy policy, rather than creating blame where it does not exist.

In closing, Mr. President, and on the larger topic of domestic energy companies,  I think it’s really unfortunate for elected officials to come down to the floor and single out specific industries, private U.S. citizens for that matter, who employ millions of Americans and blame them for our energy woes.

We’re better than that, Mr. President.

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