Increasing Transparency and Accountability in Oil Prices Act of 2008

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I want to commend the chairman of the committee, Mr. Peterson, for his work in this area. We held a hearing on this issue on Tuesday of this week. In the farm bill which the Congress just passed overwhelmingly several times, we overrode the President's veto, it includes legislative language that takes further steps to complete the closure of the Enron loophole. In that testimony we received on Tuesday, we received assurance that between the language that was in the Commodity Futures Modernization Act passed in the aftermath of the Enron scandal, and in the language that was included in the farm bill, the Enron loophole is now closed.

I have no reason to oppose this legislation and I therefore will support it. It simply tells the Commodity Futures Trading Commission to do what it already has the authority to do, and based upon the testimony that we received on Tuesday is already doing to ensure that there is not excessive speculation in the energy futures markets. I have every confidence that they will do so, that they will heed this additional voice of support for their doing their jobs. But, quite frankly, this legislation does not do what needs to be done by this Congress.

The Democratic leadership in this Congress is continuing a pattern that the American people are increasingly concerned about, and that is to do everything they can to try to blame everyone but themselves for the problem that we face in this country of having years of neglect of not having a domestic energy policy dedicated toward increasing the supply, increasing the supply of oil, increasing the supply of natural gas, increasing the supply of clean-burning coal, increasing the supply of nuclear power, increasing the supply of alternative fuels, increasing efforts to bring about new technologies. This is the all-of- the-above approach that this Congress should be taking that our conference has taken. In fact, we have worked very hard to see that this policy be brought to the floor of the House.

Yes, I will support this bill telling the CFTC to use its authority to curb excessive speculation, but I think it appalling that we aren't doing the job that needs to be done. It is being blocked by the party that controls the access to the floor of this House.

H.R. 2279, to expedite the construction of new refining capacity on closed military installations in the United States, and for other purposes, sponsored by Representative Pitts of Pennsylvania with 55 cosponsors. From the House Energy and Commerce and Armed Services Committees, last major action taken, a motion to discharge petition filed by Mr. English, petition 110-9. Why haven't we seen this bill brought to the floor of the House?

H.R. 3089, the No More Excuses Energy Act of 2007 sponsored by Representative Thornberry of Texas, 77 cosponsors, referred to the Committees on Natural Resources, House Ways and Means, and Energy and Commerce. Last major action, June 10, motion to discharge petition filed by Mr. Walberg. A motion was filed to discharge the Natural Resources, Ways and Means, and Energy and Commerce Committees of this action. No action taken. Why hasn't that bill been brought to the floor of the House?

We have this week another discharge petition on H.R. 5656 which repeals the requirement with respect to the procurement and acquisition of alternative fuels, a discharge petition filed this week by Representative Hensarling. Why hasn't this legislation been brought to the floor of this House?

There are scores of other bills sponsored by both Republicans and Democrats dedicated to relieving this energy crisis that have been bottled up by the Democratic majority.

When, Mr. Speaker, will we get the chance to vote on these very worthy bills? When will we get the chance to actually start offering relief from the outrageously high gas prices that American consumers are facing?

That's the problem we are confronting. That's the problem that the leadership in this Congress is not allowing us to address. That's what needs to be done, not telling the CFTC to do the job that they are already doing and already have the authority to do, but acting to make sure that we are increasing supply of all sources of energy, new sources of energy, traditional sources of energy, acting to make sure that the incentives are in place for Americans to conserve. My goodness, they are already doing that. We are seeing that reflected in their activities. This Congress could be helping them out. It is failing to do so. And that, Mr. Speaker, is why we are failing the American people when the leadership of this Congress does not allow us to have these votes.

I reserve the balance of my time.

Mr. Speaker, at this time it is my pleasure to yield 3 minutes to the ranking member on the subcommittee with jurisdiction over the CFTC, the gentleman from Kansas (Mr. Moran).

Mr. Speaker, I yield myself 30 seconds to respond.

I support this resolution because it gives nothing new to the CFTC but it gives it encouragement to do its work. It does not make any finding that there is excessive speculation in the market, and if there is excessive speculation in the market, then I certainly expect and support action by the CFTC to exercise its emergency powers to do so.

But the gentleman is exactly right when he notes that India and China are increasing their consumption of all different types of sources of energy, and they're not the only ones. They're just the largest ones.

I yield myself an additional 30 seconds to say further to the gentleman that when demand around the world, and not just in China and India, is increasing as steadily as it has in recent years and the United States sits back and waits for other countries to increase that supply and increases our dependence upon foreign oil from such unreliable sources as Venezuela and Nigeria and the Middle East, and we then think that simply asking the CFTC to do its job will solve this problem, that is a very serious problem.

At this time, it is my pleasure to yield 2 minutes to a member of the Agriculture Committee and the ranking member of our Department Operations and Oversight Subcommittee, the gentleman from Louisiana (Mr. Boustany).

Mr. Speaker, I yield the gentleman an additional 1 minute.

Mr. Speaker, I would like to include in the Record a joint analysis prepared by the majority and minority staff of the Senate Permanent Subcommittee on Investigations of the testimony of Michael Greenberger before the Senate Committee on Commerce, Science, and Transportation on June 3, 2008. It responds to a number of assertions made about what might happen to the market. And while I certainly would hope that something could be found to lower gas prices by as much as Mr. Greenberger suggested in his testimony, here are several pages of reasons why that may indeed not be the case.

Select Excerpts of the United States Senate Permanent Subcommittee on

Investigations

8. STATEMENT: ``Overnight, [prohibiting the trading of

energy commodities in Exempt Commercial Markets) will bring

down the price of crude oil, I believe, by 25 percent.''

RESPONSE: According to recent market data, there is little

to no trading of crude oil contracts on exempt commercial

markets in the United States. Prohibiting the trading of

energy commodities in a market in which no trading is

currently taking place is, thus, unlikely to have an effect

on the price of crude oil. Moreover, although there have

never been any Exempt Commercial Markets for agricultural

commodities, many agricultural commodities have recently

experienced substantial price spikes. There is no credible

evidence that simply amending the CEA to regulate energy

commodities as if they were agricultural commodities will

lead to lower energy prices.

19. STATEMENT (p. 8): ``The Senate Permanent Investigating

Subcommittee has now issued two reports, one in June 2006 and

one in June 2007, that make a very strong (if not

irrefutable) case that trading on ICE has been used to

manipulate or excessively speculate in U.S. delivered crude

oil and natural gas contracts. The June 2006 report cited

economists who then concluded that when a barrel of crude was

@ $77 in June 2006, $20 to $30 of that cost was due to

excessive speculation and/or manipulation on unregulated

exchanges.''

RESPONSE: The 2006 and 2007 PSI reports focused on the role

of excessive speculation in U.S. commodity markets; neither

report contained any findings on whether traders manipulated

crude oil or natural gas prices.

At this time, Mr. Speaker, I yield 1\1/2\ minutes to the gentlewoman from North Carolina (Mrs. Myrick).

Mr. Speaker, at this time, it's my pleasure to yield 2 minutes to the gentleman from Florida (Mr. Weldon).

Mr. Speaker, at this time, it's my pleasure to yield 2 minutes to the gentleman from Indiana (Mr. Burton).

Mr. Speaker, may I ask how much time is remaining on each side.

Mr. Speaker, at this time, it is my pleasure to yield 1 minute to the gentleman from Texas (Mr. Conaway), a member of the committee.

Mr. Speaker, I'd ask the chairman if he has additional speakers. I have only myself to close.

That being the case, I will yield myself the balance of my time to say to the chairman again, I thank him for his work on this issue.

I support this measure. Certainly, I expect the Commodities Futures Trading Commission to address any problems with excessive speculation in the energies markets and to use their emergency powers to do so, if appropriate.

But I will tell you that this is a problem that's been going on a lot longer than recent speculation in this market. It's been going on for years because of a lack of increase of supplies of oil and natural gas and other basic sources of energy in this country.

All we ask of the Democratic leadership is to put the bills on the floor that get what the American people want, and that is a vote to open up America to increase domestic supply of energy. The Speaker of the House doesn't have to support the legislation. The majority leader doesn't have to support the legislation. All they have to do is let this happen on a bipartisan basis, and we will have a bipartisan vote to do what the American people want. Let us have that vote. Let us have that debate on the floor of this House, and we will do what the American people want.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 6377) to direct the Commodity Futures Trading Commission to utilize all its authority, including its emergency powers, to curb immediately the role of excessive speculation in any contract market within the jurisdiction and control of the Commodity Futures Trading Commission, on or through which energy futures or swaps are traded, and to eliminate excessive speculation, price distortion, sudden or unreasonable fluctuations or unwarranted changes in prices, or other unlawful activity that is causing major market disturbances that prevent the market from accurately reflecting the forces of supply and demand for energy commodities.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, H.R. 6377 directs the CFTC to utilize all of its authority, including its emergency powers, to immediately curb the role of excessive speculation, if any, in the energy and swaps futures market within its jurisdiction, and to eliminate any unlawful activity causing major market disturbances that prevent the market from accurately reflecting the forces of supply and demand of energy commodities.

Mr. Speaker, I don't think I would be covering any new ground in this Chamber if I were to speak about high prices of gasoline. Everybody in this chamber understands that problem. But, Mr. Speaker, a growing number of people believe a flood of speculative money into the energies futures is driving the increase in prices. The weak dollar and increased worldwide demand has led to a greater number of well capitalized investors into the commodities futures market, including the crude oil market, as these investors seek greater returns than they traditionally found in cash and securities.

It is undeniable that this group of institutional investors has a greater presence in futures markets than ever before.

So what we are doing here is asking the CFTC to look into this and use the powers that they have to look at this situation and determine and give us a report which they have done in the past. We are asking them to take one more look and make sure that these additional moneys that are coming into the futures market are not having any undo effect on prices that people are concerned about.

The CFTC is the chief regulator of the commodities futures and options market. It is their responsibility to identify, pursue and prosecute fraud in this area. I believe they are doing a good job in that regard. Chairman Lukken and his staff have testified repeatedly before our committee and others that at this point they can see no evidence of speculation causing problems in these markets. But there are a lot of folks who are concerned this is going on, and so we are asking them to take one more look.

Under current law, U.S. traders can execute transactions in West Texas Intermediate crude oil, which is the benchmark oil contract on NYMEX, a CFTC-regulated exchange, and on London's ICE exchange that is regulated by the United Kingdom's FSA. The CFTC, however, has information on the positions of traders on the NYMEX that they don't have on the traders on ICE, and this is part of the issue that has caused us to be concerned because we don't have complete information on exactly what is going on in all of these markets.

Mr. Speaker, CFTC right now is taking steps to gain more information. They have gone into an agreement with the FSA to expand trader data, and that is all good and we welcome these steps, but we believe more should be done. CFTC should immediately take these steps to utilize their authority to make sure that, as I said before, there is not excessive speculation in these markets.

We on the Agriculture Committee are going to work with the CFTC to try to acquire more information, and we will thoroughly examine all of the bills in July that have been introduced in this area in a methodical way, we will listen to all sides, and we are going to try to move ahead with a consensus bill if we can come to a consensus about what, if anything, should be done to move on this situation.

Mr. Speaker, I am here today to, we hope, provide a reasonable and useful voice to come to the right conclusion and get the right answers about what is going on in the futures market and what is going on with oil prices in this country.

I reserve the balance of my time.

I am pleased now to yield to the chairman of the subcommittee that has jurisdiction over this issue and has done outstanding work in leading his subcommittee to make sure we are on top of this issue, the gentleman from North Carolina (Mr. Etheridge), for 2 minutes.

(Mr. ETHERIDGE asked and was given permission to revise and extend his remarks.)

I yield the gentleman an additional 30 seconds.

Mr. Speaker, I am now pleased to yield to the gentleman from Maryland who has sponsored legislation in this area and has a passionate interest in this issue and has been very much involved, the gentleman from Maryland (Mr. Van Hollen), for 3 minutes.

Mr. Speaker, how much time remains?

Mr. Speaker, I am now pleased to yield 3 minutes to the Chair of the House Agriculture appropriations committee who has been also very passionate in leading on this issue and also working in her committee to make sure that the CFTC has the resources they need to complete their task, the gentlelady from Connecticut (Ms. DeLauro) for 3 minutes.

Mr. Speaker, I'm now pleased to yield to my good friend and Blue Dog colleague from Utah (Mr. Matheson) for 2 minutes.

Mr. Speaker, I'm now pleased to yield 1 minute to my good friend from Vermont (Mr. Welch).

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and include extraneous material on H.R. 6377.

Mr. Speaker, I'm now pleased to yield to a leader on the Energy and Commerce Committee and energy issues in general, Mr. Markey from Massachusetts, 1\1/2\ minutes.

Mr. Speaker, I am pleased to yield 1 minute to the gentleman from Washington (Mr. Inslee).

(Mr. INSLEE asked and was given permission to revise and extend his remarks.)

At this moment we have no additional speakers, so I probably can move to close.

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, I want to say to my good friend, Mr. Goodlatte, that I appreciate his support for this measure. And what we're trying to do in our committee is to develop a consensus as we move through this issue. And there are a lot of ideas, a lot of different opinions out there, a lot of bills that have been introduced.

This is a step that we can make today I think on a basis where we can come together and make sure that the CFTC is using the powers that they have to examine this market and make sure that the speculation, the extra money that's coming in is being done properly and is not affecting these markets in a way that is not appropriate. And I trust that they will do that job.

But moving forward, what we intend to do, as I said earlier, as soon as we come back here from the July recess, our committee will convene on Wednesday after we come back and we will examine all of the bills that have been introduced or are introduced in the meantime. And we will have a debate on all the different aspects and all the different positions. And what we will try to do on that committee is to sort through all of this and hopefully come to a consensus about what is the appropriate way for us to move ahead.

These are very complicated markets and issues, and I want to make sure that whatever we do is the appropriate response, and as somebody said earlier, we don't have unintended consequences because of the actions that we take here.

So I look forward to working with my colleagues on the other side of the aisle with my colleagues on this side of the aisle to find a consensus that can have bipartisan support like we achieved on the farm bill to move something ahead that makes sense for the American people and gets the right answer.

With that, I urge adoption of the bill.

Mr. Speaker, I yield back the balance of my time.

I thank the gentleman for yielding.

I rise in support of the Energy Market Emergency Act of 2008.

I don't have to tell anyone that gas prices have skyrocketed over the last several months. We can all remember when we thought $2 a gallon gas was high. Now we would like to return to that. Now it is on average over $4.

On June 6, the price of crude oil hit an all-time record of $139 per barrel. American families are paying an average of $4.07 for gasoline, double the price from 2001 when President Bush took over. Truckers and farmers are paying an average of $4.77 per gallon for diesel, triple the price from 2001 when the President took office.

There is clearly not just one factor leading to these outrageous prices. However, there is a growing concern that excessive speculation by investors could be a significant cause of the prices we are experiencing. North Carolina families are struggling to make ends meet, as are families all across the country. Congress must act to ensure speculators are not artificially raising energy prices for their own gain while hardworking Americans are suffering.

This legislation tells the CFTC, which is responsible for overseeing our energy markets, to use all other authority to ensure that excessive speculation is not occurring.

I can't blame them. When the price of crude oil spikes $10, folks really believe something is wrong. The House Ag Committee will conduct hearings in July to examine all of the various pieces of legislation to address this issue, including legislation that I have introduced called the Increasing Transparency and Accountability Act of 2008.

I believe after a careful review we can craft responsible legislation that can improve the price discovery function of these commodity markets. But no amount of CFTC authority will make a difference if the agency doesn't have the resources to do their job.

Since 2002, trading on the commodity markets has increased six times.

While trading has increased six times, under the Bush administration, staff levels have fallen to the lowest level in the 33- year history of the exchange.

My legislation and others will increase it by 100 people. These are investigators. Let me just say for those who are listening, that means if you have a speed limit of 55 or 60 miles an hour, we are going to put more cops on the beat. That's what we need.

Mr. Speaker, I rise today in support the Energy Market Emergency Act of 2008.

I don't have to tell anyone here that gas prices have sky rocketed over the last several months. I remember a few years ago when two- dollar-a-gallon gas seemed outrageous. Now the national average is four dollars.

On June 6th, the price of crude oil hit an all time record of $139.12 per barrel.

American families are paying an average of $4.07 per gallon for regular gasoline, double the price from 2001 when President Bush took office.

Truckers and farmers are paying an average of $4.77 per gallon for diesel fuel; triple the price from 2001, again when the President took office.

There is clearly not just one factor leading to these outrageous prices. However, there is a growing concern that excessive speculation by investors could be a significant cause of the prices we are experiencing.

North Carolina's families are struggling to make ends meet while the cost of energy soars. Congress must ensure that investors are not artificially raising energy costs for their own gain while hard-working Americans are suffering.

This legislation tells the Commodity Futures Trading Commission, which is responsible for overseeing our energy markets, to use all of its authority to ensure that excessive speculation is not occurring.

I serve as chairman of the Subcommittee on General Farm Commodities and Risk Management, which has jurisdiction over the CFTC, and I'm here to tell you that people think something is not right.

And I cannot blame them. When the price of crude oil spikes $10.00 in one day, people think somebody is making some money, and it isn't them.

The House Agriculture Committee will conduct hearings in July to examine all of the various legislative proposals to address this issue, including legislation I have introduced, H.R. 6334, the Increasing Transparency and Accountability in Oil Prices Act of 2008.

I believe after a careful review, we can craft responsible legislation that can improve the price discovery function of these commodity markets.

No amount of additional CFTC authority will make a difference if the agency doesn't have the resources to do their job. Since 2000, trading on commodity markets has increased six-fold.

However, during that time, the Bush administration let staffing levels at the CFTC fall to their lowest level in the agency's 33-year history.

My legislation calls for 100 additional full-time positions at the CFTC, mostly for enforcement because they need the talent to keep an eye on these markets.

And I want to applaud Representative Rosa DeLauro for knowing this simple truth and providing more funding for the CFTC than the President requested in the Agriculture Appropriations bill.

Commodity markets are like highways in that both have limits. If drivers don't think there are any cops watching on the road, they are going to push past the speed limits. If the CFTC doesn't have enough staff to monitor an ever growing and changing marketplace, investors will push the limits there as well.

Today's directive to the CFTC will send a message to the administration that they must get serious about these sky rocketing costs

and will pave the way for more comprehensive legislation in the future. I urge my colleagues to support this legislation.

I thank my colleague for yielding time.

Mr. Speaker, I rise in support of this bill, but I want to restate that it's a redundancy. It's a restatement of CFTC's authority, and it does urge them to

move forward with haste, which I believe that they are doing. We heard testimony just yesterday, and the chairman of the CFTC pointed out a couple things: One, they're taking the lead in creating this interagency process working with all of the other agencies, the Department of Treasury, the SEC and others to really take a hard look at this issue of speculation.

Secondly, they've moved forward with haste to come up with a mutual recognition agreement with London and other jurisdictions to broaden their reach so that they can find out and get more transparency and more information as to what is really happening in these markets. The energy markets are a very complicated issue. And the danger is that Congress will take steps before we have adequate information that could truly be detrimental.

I fear that this debate today is taking valuable floor time away from bills that would really make a difference in working on our energy issues. We need a long-term strategy, a mid-term, and a short-term strategy clearly. And dealing with the issue of speculation is part of a short-term strategy.

But we cannot get away from the fact that we have very tight supply and demand. It is about evenly matched. And when you have a million barrels a day offline because of terrorist activity in Nigeria, when you have Venezuela's production declining because of aged technology and mismanagement, when you have Mexican production declining because of mismanagement and contract problems, these are all issues that are further putting stress on supply.

Finally, I would point out on the supply side that we have a shortage of rig materials around the world, actually. China is dealing with pulling in all kinds of commodities and it is adding costs to this. We have a workforce shortage in this oil and gas industry. There are major factors all coming into the supply side of this that are a problem.

I think it's important to recognize these factors. What is driving uncertainty is clearly the lack of a confidence of energy policy, and this House can take action. There are bills ready. This House could clearly take action. We've got a number of bills, as my colleague, the ranking member of this committee, outlined earlier.

Furthermore, the London loophole, CFTC has taken steps with their mutual recognition agreement. The farm bill provisions take substantive steps to close the Enron loophole.

And finally, if we move prematurely to impose artificial standards and limits to trading, we could definitely hurt our transportation companies, our truckers, our farmers who hedge on these high energy prices.

Furthermore, we may drive transactions into less transparent markets such as Dubai and other markets. This also denies a threat that the low value of the dollar, and there is a threat globally that we could be seeing a move in energy transaction, too. A different currency, the euro. And this is a further issue.

So we need to move forward and not delay any further.

I thank my colleague and the chairman of the Agriculture Committee, Mr. Peterson, for his leadership on this, along with our colleagues Ms. DeLauro, Mr. Stupak, Mr. Etheridge, Mr. Larson, and many others who have moved quickly to address the problems of rampant speculation in the energy futures market.

The title of this legislation is the Energy Markets Emergency Act, and what it does is direct the Commodities Futures Trading Commission, the CFTC, to invoke its emergency powers to crack down on extreme speculation in the futures market. We all know that families across this country are facing emergencies in their family budgets, and it's time that the CFTC stepped forward and treated this like the emergency that it is.

Part of the rise in prices is of course due to supply and demand and the fact that China and India are boosting a demand. That's part of it. But the other part of it is in fact an increase in speculation, extreme speculation. There's been testimony before this Congress in front of the committee, subcommittee of Mr. Stupak, and on the Senate side and the House side by Professor Greenberger from the University of Maryland School of Law and many others that make it absolutely clear that a component of the increase in price does not have to do solely with supply and demand.

And the CFTC has the authority under the statute to invoke its emergency powers if market prices do not adequately reflect the forces of supply and demand. And I must say, Mr. Goodlatte, that it has not done that. This legislation does not say to the CFTC, Just keep doing what you're doing. The fact of the matter is, they haven't made that finding, they have not invoked their emergency powers, and there's some permanent issues we have to come back and fix. We have to finally close the Enron loophole. We need to deal with what's called the London loophole. We need to do some things on an emergency basis.

But if they invoke their emergency powers, they will have the authority to deal with those issues and close those loopholes on an emergency basis, and they have not done that. If they access and invoke these powers, they can put new position limits on, they can require greater margin requirements, they can even suspend tradings in certain funds.

So what this does is say to them, use the powers that you have; do not sit on your hands and do not stand by and refuse to enact your emergency powers because while they have taken certain steps, they have not made the finding that this bill essentially says which is that speculation is part of the problem. No one says it's all of the problem. But it is a part of the problem, and they therefore have the authority under existing law to invoke the emergency powers, and it opens up a whole set of new tools that they are not using.

So on this immediate basis, they can do everything necessary to address the problems of the Enron loophole, and they can do everything necessary to deal with the London loophole. They are not doing it today. We are directing them to treat this as the emergency it is.