Press Release of Senator Cantwell

Senators Feinstein, Cantwell, Snowe, Levin Lead Bipartisan Coalition in Introducing Legislation to Increase Transparency and Oversight in Energy Markets

Tuesday, February 13,2007

WASHINGTON, DC - U.S. Senators Dianne Feinstein (D-CA), Olympia Snowe (R-ME), Carl Levin (D-MI) and Maria Cantwell (D-WA) today joined with a bipartisan coalition to introduce legislation to increase transparency and oversight for the electronic over-the-counter trading of energy commodities, such as oil, natural gas, coal, and electricity.

Specifically, the bill would:

- Require U.S. energy traders who electronically trade futures in the U.S. to keep records and report large positions carried by their market participants in energy commodities for five years or longer. These are the same requirements that apply to traders that do business on the New York Mercantile Exchange (NYMEX). Energy commodities include coal, crude oil, gasoline, heating oil, diesel fuel, electricity, propane, and natural gas.

- Require traders to provide such records to the Commodity Futures Trading Commission (CFTC) or the Justice Department upon request, the same reporting requirements for NYMEX traders. - Require persons in the United States who trade U.S. energy commodities delivered in the U.S. on foreign futures exchanges to keep similar records and report large trades.

The bill is also cosponsored by Senators Barbara Boxer (D-CA) Russ Feingold (D-WI.), Jeff Bingaman (D-NM) Joe Lieberman (I-CT) Frank Lautenberg (D-NJ), and Barbara Mikulski (D-MD).

"Closing loopholes exploited by companies like Enron to keep their actions hidden and beyond the reach of federal regulators is key to preventing market manipulation in the future and ensuring fair energy prices for American families and businesses," said Senator Cantwell, a member of the Senate Energy and Commerce Committees. "By requiring open books and transparent markets, we can catch patterns of irregular trading, stop dishonest energy traders, and avoid a repeat of the western energy crisis."

"The integrity of the markets where futures of oil and natural gas are traded has never been more important," Senator Feinstein said. "But we've learned the hard way from cases like Enron and Amaranth that the federal agency tasked with oversight in these markets - the Commodity Futures Trading Commission or CFTC - lacks the tools to detect and prevent manipulation and fraud. Meanwhile, consumers are forced to foot the bill while oil companies and traders only get richer. The time has come to require record-keeping and an audit trail that will shine light on energy market trading."

"This legislation will restore transparency to electronic and foreign markets for U.S. energy commodities and ensure the American people pay a fair, and not an artificially inflated price, for oil products," Senator Snowe said. "The Senate should recognize that giving the Commodity Futures Trade Commission the authority it needs to identify and prevent speculation, manipulation, or even hoarding of crude oil markets is the right course of action we should act accordingly."

"I am pleased once again to co-sponsor the Oil and Gas Traders Oversight Act which is aimed at putting the cop back on the beat in our energy markets. Speculation and trading on unregulated exchanges are fueling wild swings in energy prices that are harming U.S. families, businesses, and the economy as a whole. With an impressive array of industrial, consumer, and natural gas utilities supporting this legislation, and the new leadership in Congress, the signs are good that this Congress will finally enact legislation to close the Enron loophole, increase market transparency, and strengthen federal oversight of energy pricing," Senator Levin said.

Background

Prior to 2000, U.S. energy futures were traded exclusively on regulated markets like NYMEX, where the CFTC polices the market for price manipulation or fraud. Since 2000, however, there has been a tremendous growth in the trading of oil and gas futures on unregulated, electronic markets. These electronic trades were exempted from CFTC oversight by a provision inserted at the behest of Enron and other large energy traders into the conference report on the Commodity Futures Modernization Act of 2000.

In January, the CFTC announced that the Intercontinental Exchange, or ICE, the largest electronic trading company, has agreed to voluntarily provide information on over-the-counter trades. The legislation introduced Tuesday would ensure that this reporting process becomes law, and therefore is not subject to an administrative decision within an individual company.


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Maria's Monday Memo To sign up for Maria's weekly newsletter, enter your email address: Search The Site	News Press Release of Senator Cantwell Senators Feinstein, Cantwell, Snowe, Levin Lead Bipartisan Coalition in Introducing Legislation to Increase Transparency and Oversight in Energy Markets Tuesday, February 13,2007 WASHINGTON, DC - U.S. Senators Dianne Feinstein (D-CA), Olympia Snowe (R-ME), Carl Levin (D-MI) and Maria Cantwell (D-WA) today joined with a bipartisan coalition to introduce legislation to increase transparency and oversight for the electronic over-the-counter trading of energy commodities, such as oil, natural gas, coal, and electricity. Specifically, the bill would: - Require U.S. energy traders who electronically trade futures in the U.S. to keep records and report large positions carried by their market participants in energy commodities for five years or longer. These are the same requirements that apply to traders that do business on the New York Mercantile Exchange (NYMEX). Energy commodities include coal, crude oil, gasoline, heating oil, diesel fuel, electricity, propane, and natural gas. - Require traders to provide such records to the Commodity Futures Trading Commission (CFTC) or the Justice Department upon request, the same reporting requirements for NYMEX traders. - Require persons in the United States who trade U.S. energy commodities delivered in the U.S. on foreign futures exchanges to keep similar records and report large trades. The bill is also cosponsored by Senators Barbara Boxer (D-CA) Russ Feingold (D-WI.), Jeff Bingaman (D-NM) Joe Lieberman (I-CT) Frank Lautenberg (D-NJ), and Barbara Mikulski (D-MD). "Closing loopholes exploited by companies like Enron to keep their actions hidden and beyond the reach of federal regulators is key to preventing market manipulation in the future and ensuring fair energy prices for American families and businesses," said Senator Cantwell, a member of the Senate Energy and Commerce Committees. "By requiring open books and transparent markets, we can catch patterns of irregular trading, stop dishonest energy traders, and avoid a repeat of the western energy crisis." "The integrity of the markets where futures of oil and natural gas are traded has never been more important," Senator Feinstein said. "But we've learned the hard way from cases like Enron and Amaranth that the federal agency tasked with oversight in these markets - the Commodity Futures Trading Commission or CFTC - lacks the tools to detect and prevent manipulation and fraud. Meanwhile, consumers are forced to foot the bill while oil companies and traders only get richer. The time has come to require record-keeping and an audit trail that will shine light on energy market trading." "This legislation will restore transparency to electronic and foreign markets for U.S. energy commodities and ensure the American people pay a fair, and not an artificially inflated price, for oil products," Senator Snowe said. "The Senate should recognize that giving the Commodity Futures Trade Commission the authority it needs to identify and prevent speculation, manipulation, or even hoarding of crude oil markets is the right course of action we should act accordingly." "I am pleased once again to co-sponsor the Oil and Gas Traders Oversight Act which is aimed at putting the cop back on the beat in our energy markets. Speculation and trading on unregulated exchanges are fueling wild swings in energy prices that are harming U.S. families, businesses, and the economy as a whole. With an impressive array of industrial, consumer, and natural gas utilities supporting this legislation, and the new leadership in Congress, the signs are good that this Congress will finally enact legislation to close the Enron loophole, increase market transparency, and strengthen federal oversight of energy pricing," Senator Levin said. Background Prior to 2000, U.S. energy futures were traded exclusively on regulated markets like NYMEX, where the CFTC polices the market for price manipulation or fraud. Since 2000, however, there has been a tremendous growth in the trading of oil and gas futures on unregulated, electronic markets. These electronic trades were exempted from CFTC oversight by a provision inserted at the behest of Enron and other large energy traders into the conference report on the Commodity Futures Modernization Act of 2000. In January, the CFTC announced that the Intercontinental Exchange, or ICE, the largest electronic trading company, has agreed to voluntarily provide information on over-the-counter trades. The legislation introduced Tuesday would ensure that this reporting process becomes law, and therefore is not subject to an administrative decision within an individual company.
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