'S.O.S. Now' Aims to Fight Oil-Market Speculation
July 10, 2008 — A coalition of the major airlines took the extraordinary step today of co-signing a common e-mail to their respective customer lists. The e-mail, signed by the top executives of a dozen major airlines, identifies their joint cause, “Stop Oil Speculation (S.O.S.) Now,” and encourages air-travel customers to rally support behind re-regulation of oil-market speculating practices.
"We all, including the airlines, have something in common - the rising cost of petroleum fuel is a significant issue for the EAA community of active participants," said EAA President Tom Poberezny. "This information bears review."
The “S.O.S. Now” e-mail acknowledges that high oil prices are, in part, a result of normal market forces of supply and demand. It adds, however, that these "normal market forces are being dangerously amplified by poorly regulated market speculation."
In short, the airline group asserts that paper trading and reselling of oil futures contracts has increased dramatically over the past 20 years, as regulatory limits have weakened or disappeared. "A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab. Some market experts estimate that current prices reflect as much as $30 to $60 per barrel in unnecessary speculative cost," the joint e-mail read.
Accordingly, the airlines are calling for restored regulatory limits on market speculation to complement nationwide efforts to conserve energy and grow the supply. Their e-mail directs readers to www.StopOilSpeculationNow.com/sos/, a website designed to encourage federal legislative action.
Meanwhile, the EAA community continues to explore measures aimed at containing the cost of personal flight and at expanding access to this pursuit.
Concerns about the rising cost of fuel and the diminished availability of aviation-formulated fuel have prompted definitive action from the EAA community. "We've petitioned the FAA to revise regulations so as to allow for the use of electric motors in light-sport aircraft, and we're creating an environment to facilitate rapid acceleration of the development of this technology. We also continue to advocate on a state-by-state basis to protect the availability of ethanol-fee autofuel for use in certain aircraft," Poberezny said.