The House of Representatives today passed legislation introduced by U.S. Representatives Chris Van Hollen (D-MD), Colin Peterson (D-MD), Chairman of the House Committee on Agriculture, and Rosa DeLauro (D-CT), chairwoman of the Agriculture-FDA Appropriations Subcommittee, Bart Stupak (D-MI) and other Members of Congress that would address the rampant speculation contributing to skyrocketing oil and gas prices. The Energy Markets Emergency Act would direct the Commodity Futures Trading Commission (CFTC) to invoke its emergency authority under the Commodity Exchange Act to ensure that the market price for energy commodities accurately reflects the forces of supply and demand. The legislation passed on a vote of 402 to 19 and is pending in the Senate.
The CFTC has provided Congress with data demonstrating that speculator participation in the energy futures markets has dramatically increased from 37% in 2000 to as high as 71% in 2008. Additionally, assets allocated to unregulated commodity index strategies have risen nearly twenty-fold over the past four years, from $13 billion at the end of 2003 to $260 billion as of March 2008. The result is an energy market that is enriching a small group of speculators at the public’s expense.
“We must act now,” said Van Hollen. “American families are being squeezed economically by rising gas prices. The CFTC should not be sitting on its hands at this critical time. They should invoke their emergency powers to help Americans who are facing emergency budget situations. This bill directs them to use all of their powers to do that.”
The Van Hollen-Peterson bill would give the CFTC authority to impose new position limits, increase margin requirements and take other corrective action necessary to eliminate manipulation, fraud and excessive speculation in the energy marketplace.