The U.S. said it is investigating whether soaring oil prices are being unfairly manipulated, the papers report.

The Wall Street Journal on A1 calls the announcement “unusual” because the investigation (or sixty investigations, it says) is still under way and The Washington Post on D1 quotes the regulator, the Commodity Futures Trading Commission, as saying it took the “extraordinary step” of disclosing the probe “because of today’s unprecedented market conditions.” The New York Times on C4 says the regulators are under “enormous political pressure,” including from a letter the Los Angeles Times says was sent last week by twenty-two senators.

Never fear, consumers! The regulators, pushed by politicians, are looking for scapegoats. The WSJ:

Many economists and oil-industry executives say possible shenanigans by market traders have little or nothing to do with the high price of oil. They maintain that the rise is mainly due to fundamental factors such as rising demand, constrained supplies and the weak dollar.

Still, suspicions have lingered that speculators have helped drive oil prices higher. At a series of congressional hearings over the past month, energy consumer groups and some financial insiders have contended that large investments in commodity futures by hedge funds and pension funds are distorting prices.

But, alas, the LAT finds an unnamed CFTC official who admits there may be no heads to mount on pikes.

The commission’s investigation is unlikely to be as deep or sweeping as Democrats have demanded. A commission official, who spoke on condition of anonymity because he is not authorized to discuss ongoing investigations publicly, said the commission’s economists were fairly sure that there had been no criminal manipulation of the market.

It appears certain that speculators are driving up the cost of oil, betting that it’s becoming more scarce though demand keeps on chugging along—about as safe a bet as you can find these days. But as the Post says, speculation “is not illegal.”

“Clean coal” ain’t easy

The Times fronts a story saying the move toward “clean coal” is running into some big problems. Namely, making it clean means scrubbing the carbon emissions when it’s burned and shooting them back into the ground, a process called “sequestration.” And the details about how to do that and who’s liable if it comes back up through the ground like an invisible bubbling crude, still are far from being determined.

Coal is abundant and cheap, assuring that it will continue to be used. But the failure to start building, testing, tweaking and perfecting carbon capture and storage means that developing the technology may come too late to make coal compatible with limiting global warming…

Plans to combat global warming generally assume that continued use of coal for power plants is unavoidable for at least several decades. Therefore, starting as early as 2020, forecasters assume that carbon dioxide emitted by new power plants will have to be captured and stored underground, to cut down on the amount of global-warming gases in the atmosphere.

The Times says the cancellation of major projects in Illinois and several other states leaves “only a handful of small projects” and that “most of this work has come to a halt.” It also says another type of carbon saver (compared to a typically, dirty coal plant, of course) called gasification is in trouble, too.

Oil boom not always a boon

In other energy news, the WSJ fronts news that a BP joint venture in Russia is running into problems with its partners, who want the venture’s CEO switched. The paper says the outcome of the dispute will reflect just how much Russia’s economic policies have changed under new President Medvedev from Putin, who moved toward nationalizing its oil industry.

And even the Arabs are feeling the woes of the oil boom. The WSJ on A9 says record oil prices are “a blessing and a curse” for Gulf countries, which are getting hit with high inflation. Rents were up 16 percent in Dubai last year, while overall Saudi prices jumped 10.5 percent.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.