FTC to investigate oil firms, traders

WASHINGTON — The Federal Trade Commission (FTC) will announce today its plan for investigating and regulating possible market manipulation by oil companies, traders and others, Washington Sen. Maria Cantwell said Thursday.

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

Cantwell, a Democrat, said the best way to bring down the price of gasoline at the pump is for the administration to start policing the oil industry.

"The jury is still out on how tough the FTC will be," Cantwell said. "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.

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

Cantwell said there was no reason for gasoline prices to double in a year and headed for $4 a gallon when there has been no disruption in supply and U.S. demand has cooled.

After the 2000-01 West Coast energy crisis, when electricity prices rose steeply, Congress gave the Federal Energy Regulatory Commission (FERC) 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.

The FTC had no comment.