Commodity Prices Oversight and Transparency Act of 2008

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

For the past few years, the Committee on Agriculture has taken a proactive approach to try to understand and monitor the issue of trading activity in the futures markets and conduct appropriate oversight. This was so we could make an informed decision about whether or not commodity markets need greater transparency and accountability.

Last week, CFTC Acting Chairman Walt Lukken presented a 6-month study of the futures market to the committee. Chairman Lukken and his staff spent a lot of hours and a great deal of work over the past 3 months to produce that report. We appreciated their efforts, especially for keeping an aggressive timetable.

The CFTC report was useful in providing a reference point in determining the relationship between index fund-related activity in the over-the-counter markets and commodity futures, and energy and agriculture prices in the United States.

However, as we move forward today with H.R. 6604, there are key factors for us to consider.

One, after hearing testimony from Mr. Lukken, and after examining the findings of this report, it is evident that our priority should be ensuring that the CFTC has the tools and resources it needs to protect and preserve the integrity of our futures markets.

The CFTC devoted more than 30 employees and 4,000 staff hours to produce this report. Those who have read the report all agree that these broad snapshots of the markets are necessary, but the CFTC does not have the staff to dedicate to similar projects.

This bill directs the CFTC to hire 100 additional employees. But because there has not been a single appropriations bill passed by both Chambers and presented to the President, I have no idea how the already underfunded agency will be able to do so.

The Democratic leadership is fond of pointing the finger of blame, but ultimately the Democratic leadership has one duty, to consider and pass the appropriations bills that fund the government. The Democratic leadership has refused to execute this duty and has failed the American taxpayer.

Second, this bill will not reduce the price of oil. It will not relieve the burden many Americans face at the gas pump. In order to achieve that very important goal, Congress must focus on creating a viable energy policy that goes beyond the measures passed thus far to increase the domestic supply of energy sources and promote energy independence.

Though I have concerns that some of the provisions in H.R. 6604 are too far-reaching, I will continue to support this bill to ensure that the CFTC has all the tools it needs to preserve and protect the integrity of our futures markets.

But I know, as I have worked closely with the chairman of the committee, who has worked in a very bipartisan fashion to fashion this legislation and address these concerns and make sure the CFTC has the necessary oversight authority and capability, that this bill would provide for it.

I also know that this is not what the American people want and need when it comes to energy. I know that there are many on the other side of the aisle who are hoping still to have an opportunity to vote, not on a hoax, not on a sham like we did 2 days ago, but on a real American energy bill that provides for real offshore drilling, not a bill that would shut off 80 to 90 percent of the known oil and natural gas reserves from access, not a bill that does nothing to promote nuclear power, not a bill that doesn't take up consideration of drilling in the Arctic National Wildlife Refuge, not a bill that shuts us off from tapping into the oil shale reserves that are in tremendous abundance in the Rocky Mountain States, not a bill that does nothing for coal-to- liquid and other clean coal technologies that would benefit the American people, since we have the largest coal reserves in the world, not a bill that imposes tax increases in order to get to the alternative forms of energy that the American people want to have, but, rather, the American Energy Act, something that we asked this Congress to bring up before we went into a 5-week August recess.

While the Speaker of the House ordered the microphones turned off, the C-SPAN cameras turned off, the lights turned down low, we stayed here day after day, week after week, calling for a vote on the American Energy Act. We didn't get it.

Instead, we got this sham hoax that won't produce a drop of new oil, won't produce a cubic foot of new natural gas, will do nothing for nuclear power, will do nothing for coal, will do nothing for alternative forms of energy. It is simply an effort to try to derail what the American people clearly wanted to see on the floor of this House.

We still haven't seen it. This bill doesn't do it. We need to have that vote, and that's what the debate should be about here today, not this legislation which is good, but does not do what the American people want.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, at this time I am pleased to yield 4 minutes to the gentleman from Florida (Mr. Feeney).

Mr. Speaker, it is my pleasure to yield 5 minutes to the gentleman from Kansas (Mr. Moran), the ranking Republican member on the subcommittee with jurisdiction over commodity futures trading.

Mr. Speaker, I am pleased to recognize the gentleman from Connecticut (Mr. Shays) for such time as he may consume.

Will the gentleman yield?

I have only myself to close. If the gentleman is thinking that we're close to closing, then I am prepared to do that.

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

As I say, I appreciate working with the gentleman from North Carolina and the gentleman from Minnesota on this legislation.

I think this legislation gives to the Commodity Futures Trading Commission the necessary tools for appropriate oversight and enforcement. I think this is a light touch. I do not think that it interferes in the marketplace.

And I think that the evidence that was brought forth by the recent report submitted by the CFTC is very strong evidence that the marketplace is working very well, but it needs constant vigilance. We can see that with the difficulties that are being experienced around the country and around the world in other types of markets.

Certainly in the mortgage area and other financial areas, the risk of not giving the regulatory agencies the appropriate authority to do oversight and to act is certainly a grave concern. But I think we are doing that in this area. I think the CFTC is doing that in this area, and I think this legislation will help to enhance their ability to remain vigilant in making sure that this market operates properly; that there is not excessive speculation; that there is not manipulation of this marketplace.

Having said all of that, I will say, once again, that this is not the issue that we should be debating here today. I support this legislation. I will vote for it. But we deserve an opportunity to vote on what the American people want. And poll after poll have shown that they want to see a real energy act. They know that the problem with the high price of energy is the lack of supply. They know the problem with the disruption of our energy supply that just occurred due to Hurricane Ike is because we have not enough refinery capacity in this country, and that it is not distributed around the United States.

The American Energy Act provides for using abandoned U.S. military bases to build new refineries. We haven't built a new one in more than 30 years. And the bill that was brought to the floor of the House by the Democratic leadership earlier this week did absolutely nothing in that area.

We're now importing refined petroleum products, paying a higher price. We're seeing more and more billions of dollars going out of this country every week, costing America jobs, harming our economy because we are so dependent upon foreign oil, at the same time that we have huge resources, not just oil, but natural gas, coal, the potential of new nuclear power, as well as a whole array of alternative sources of energy like wind and solar and geothermal and biomass and hydrogen. All of these things are available to us if we will take the leadership here in this Congress and get the American Government out of the way of developing these new sources of energy. But, instead of doing that, we bring a no drill, no energy bill to the floor that was clearly a sham, a hoax on the American people.

We have abundant resources in oil. The estimates are that we could be producing 3 to 4 million barrels of oil from the Outer Continental Shelf. The bill that was brought forth on the floor of the House shuts off 80 to 90 percent of that oil from access to the marketplace because they don't allow drilling.

I introduced legislation, as have other people, to allow drilling off the coast of our respective States. I've introduced one for Virginia that has strong support in our delegation. And yet the legislation that was brought forward earlier this week does not provide any royalties for the States. So our Governor, Democratic Governor of the State has already indicated that if the State can't benefit from deriving royalties that can be used for developing better transportation systems, alternative forms of energy, public education and so on, if it can't be used for that, he's not interested in participating. So that bill was meaningless. It was a sham.

We need to bring forth real legislation like the American Energy Act that shares those royalties with the States so that they're able to do that.

It's estimated that we could have a million barrels of oil a day coming down the pipeline that already exists in Canada, if we would drill for oil in the Arctic National Wildlife Refuge, an area the size of the State of South Carolina; and the area that would be utilized for drilling for oil is about 2,000 acres, like a postage stamp on a football field. That's how much of this land of this huge area would be utilized. The people of Alaska support it. The Governor of Alaska, Sarah Palin, supports it.

Are we doing that?

No. Wouldn't even bring it up. Wouldn't bring up a bill that we could even offer an amendment to to allow for that to take place.

Meanwhile, the oil that comes from the Prudhoe Bay area is declining. It was 2.1 million barrels a day at its peak. It's now down to 700,000 barrels a day. We're told that when it gets down to 300,000 barrels a day, we'll have to close down the pipeline because it's not economically efficient to transport the oil.

At the same time we could be adding a million barrels of oil a day for an estimated 30 years, we're at risk of losing not just that million, but an additional 300,000 barrels of oil a day, about 6 percent of the consumption in this country every day for 30 years.

And then look at the oil shale available in the Rocky Mountain States. Here we have an estimated somewhere between 800 billion and 2 trillion barrels of oil that can be extracted from that oil shale, much like the Canadians are extracting oil from tar sands in Canada. So while they're doing that in Canada, this Congress last year passed legislation that prohibits the United States Government from buying that oil from Canada.

And then in terms of our own reserves which are huge, to just give you an idea, since the first oil well was drilled in Pennsylvania in 1859, until today, the entire world has used about 1 trillion barrels of oil. And yet we're leaving untapped, because legislation was not brought forward to address it, untapped, 800 billion to 2 trillion barrels of oil available to us in that oil shale deposits in the Rocky Mountain States. It's a shame, Mr. Speaker, that we're not doing that today.

Coal reserves. We have more coal reserves than any other nation in the world. New technology exists to convert it to liquid that can be used for transportation purposes. We have new technology that is cleaner burning coal, and yet we're not doing anything in the legislation that was offered here earlier this week to tap into that.

Nuclear power. It's been correctly noted here today that while the United States still derives 20 percent of its electricity from nuclear power, France today gets close to 80 percent of its electricity from nuclear power. They continue to develop that technology. We haven't, for 30 years. We haven't for 30 years built a single new nuclear power plant. There are now some on the drawing boards, thanks to legislation that the Congress adopted 2 years ago to incentivize that.

But because of regulations that stand in the way, we will not have the opportunity to see a single kilowatt hour of electricity generated from those new nuclear power plants for at least 10 years. Why?

Because this Democratic leadership would not bring up legislation like the American Energy Act that enables that.

The same thing with the development of alternative fuels like wind and solar and geothermal and hydrogen and biomass. What do they do to incentivize? They increase taxes. That's the last thing we need right now when the American economy is in the condition that it's in, to have tax increases to pay for something that we could pay for with the royalties that would come from drilling offshore, from drilling in Alaska, from tapping into that oil shale, from drilling for natural gas where the largest deposit known in the world is in the Gulf of Mexico, and yet we can't have access to it.

There's natural gas all down the eastern coast of the United States. We can't have access to that. Why? Because they won't share the royalties with the States and it won't happen. And they've kept some of these areas off limits in their legislation as well.

This is a travesty, Mr. Speaker. We should be having the American Energy Act on the floor today. That's what the American people want. That's what will create millions of American jobs in creating this new energy, and in revitalizing our industry and revitalizing manufacturing and strengthening agricultural production in this country and strengthening all of American commerce, making us more competitive with the rest of the world if we would simply seek to be energy independent, which we could accomplish in 10 or 15 years if the leadership of this Congress would simply bring forward legislation that would enable us to empower America to have real energy independence and real American jobs and save this economy.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I am pleased to yield 3 minutes to the gentleman from Ohio (Mr. LaTourette).

Mr. Speaker, I have no further speakers. I will reserve the balance of my time.

Mr. Speaker, I am prepared to close if the gentleman from Minnesota is.

I would again thank the gentleman for his hard work on this legislation. This is not legislation that this committee has in any way taken lightly over the past several years. We've conducted oversight into the activities of the Commodity Futures Trading Commission and the futures markets. We've done it in a bipartisan way. We have watched closely to make sure that the commission has the resources it needs to do its job.

We found some areas where we think it could use some additional help in terms of personnel, in terms of the authority to gather information, and in a few instances in giving them additional authority to act if they find that there are indicators in the marketplace that it's not functioning properly, that there is excessive speculation and that there is manipulation; and this legislation does that, and I support that. Although I do have some reservations about the legislation, I think it is legislation that deserves to be passed into law.

However, I will say it once again that this is not the legislation that the American people want and expect to see us debating on the floor of the House today. They want real energy legislation, not the sham bill that was offered 2 days ago, but legislation that would allow for real drilling for American oil and natural gas and would allow for utilizing new clean-burning coal technologies, that would expand our nuclear power generation of electricity, that would expand our alternative forms of energy.

And as we move in that direction, utilizing the resources that are created by producing American energy to accomplish more in the areas of wind and solar and geothermal and hydrogen and biomass and tidal energy production and a whole array of others, that we are simply neglecting because this Congress, the Democratic leadership, refuses to bring to the floor for a vote the American Energy Act, which would command very, very overwhelming bipartisan support if it were brought to the floor for a vote.

But it's more than just what consumers are paying at the gas pump. It's more than what they're worried about having to pay to fill their tanks with oil or kerosene to heat their homes this winter or their natural gas bills or their electric bills that are going up and up. It's more than that. It's about the American economy, and it's about American jobs.

This legislation would create millions of American jobs, not only in energy production but also in manufacturing and agriculture, in a whole host of areas that would make America more confident, would make America more competitive with the rest of the world. We need this legislation. We need it badly. It will be a shame, Mr. Speaker, if we leave town without passing the American Energy Act.

I yield back the balance of my time.

I thank the gentleman for yielding, and I would join him in supporting this motion to recommit because it would help to assure a great many Members on our side of the aisle that the concerns raised about the legislation that somehow

this might prove to be disruptive of the markets would indeed not occur. It would simply require that the CFTC examine that and certify that they do not believe that that would be the case, and then the legislation could proceed to be fully implemented, and I think this is a wise consideration.

The evidence that we have before us from the findings of a recent CFTC report is that these markets are functioning well. I think this legislation will enable them to continue to function well, but it does not, I think, in any way hurt and could, in fact, indeed enhance the operation of CFTC for them to require to make this investigation and make this certification that people, millions, tens of millions of Americans whose pension funds may include some investment in commodity futures markets will be unaffected by the legislation in terms of empowering the CFTC to conduct further oversight and to take further action as is allowed by the legislation.

Again, I would point out that the best thing we can do to secure the pension funds of Americans would be to create more energy in this country that would meet the supply demands that are necessary, would help to hold down the cost of oil and natural gas and electricity and everything else that drives this economy, both in terms of our transportation, our manufacturing, the heating of our homes. All of these things would be greater enhanced if we would have the American Energy Act brought before us.

Unfortunately, I believe the American Energy Act would not be a germane motion to recommit. Otherwise, we'd be offering it right now, but I believe the gentleman's alternative is a good one, and I support it.

Mr. Speaker, I rise today, in contrast to my colleagues on the committee and subcommittee, in opposition to H.R. 6604. It is an awkward position to be in because I spend more time and have a greater closer working relationship with the three members of the House of Representatives who are here today speaking from the Agriculture Committee in favor of this legislation than probably any group of Members of Congress since I came to Congress.

But I rise today in opposition to this legislation for the same reason that I did nearly a month and a half ago. This bill will do little, if anything, to bring down the price of energy. In fact, certain provisions of this bill could likely lead to less market transparency and increased market volatility. Unlike one and a half months ago, however, Congress has some data provided by the CFTC. The data shows that the commodity markets were not broken, and while crude oil went from $96 per barrel to $146 per barrel over the first 6 months of this year, the aggregate long position of index traders and swap dealers fell by 11 percent or 45,000 contracts.

As I stated back in July, I favor changes in the Commodities Exchange Act that will improve market transparency, oversight and enforcement activities. In fact, in working with the CFTC and others, I have introduced legislation, H.R. 6921, that I believe will enhance transparency in the futures markets without disrupting the markets. Based on consensus recommendations of the CFTC, the bill that I have introduced codifies the recommendations of the commission that they suggested would benefit from codification that were presented to our committee. That hearing has been referenced. It just occurred on September 11.

What my bill does not do and what this bill does, this bill on the House floor, is redefine a bona fide hedging transaction to prohibit the ability of legitimate market participants from utilizing the market, push domestic traders overseas where CFTC will have little oversight and contains cumbersome and contradictory requirements that will overburden the CFTC staff and lead to little useful information.

In July I said this bill was put together quickly, in fact I thought too quickly and went too far. The information provided by the CFTC at our hearing on September 11 in my opinion confirmed that fact. Given that this bill was defeated on suspension and it includes provisions that go beyond the scope of the commission's recommendations, one would think that we would now take that bill back to committee and craft a more precise product rather than bringing the same product to the House floor. We asked for more information, we got more information, and yet the crux of this legislation didn't change.

A well-crafted bill needs to provide additional transparency, oversight authority, and not exclude legitimate market participants or reduce market liquidity. One of the problems of this legislation, as I said, is it will reduce market transparency. This is because certain provisions, like the provision dealing with the foreign boards of trade that seek direct access to U.S. markets, will push traders to foreign markets. Rather than giving the CFTC a better picture of markets to prevent fraud and manipulation, it will actually restrict the ability of the CFTC to see that market.

In addition, the bill errantly attempts to define a ``bona fide hedging transaction.'' In its current form, section 8 will exclude legitimate commercial market participants from properly hedging risk. This will cause immediate disruption of the markets as the legitimate market participants are forced out of the market. It will reduce market liquidity and increase price volatility.

I am also concerned with provisions in this bill that require routine reporting and potential use of position limits in over-the-counter transactions that are ``fungible.'' ``Fungible'' is not defined and suggests that a significant amount of CFTC transactions would be implicated by this section.

I am especially concerned about the authority of section 14 which gives the CFTC the opportunity to impose position limits on over-the- counter trades. This is a problem because the OTC trades are nonstandardized contracts. Unlike standardized contracts traded on designated contract markets, OTC trades are often tailored to manage a specific company's risk in a market. And unlike a contract traded on a designated contract market, an OTC trade is made with a single counterparty. On a designated contract market, unlike many OTC trades, a clearinghouse is the counterparty to every contract and can facilitate liquidation of a position. In an OTC trade, if one party is in violation of a position limit and the other is not, liquidation of a position will adversely affect the party that is in compliance, again causing greater market volatility and increased cash prices of a commodity because of a disruption in commercial market participant's risk management strategy.

I think this bill has some technical problems that will harm price discovery and risk management strategies. It should be returned to committee where we address, again, the root cause of high energy prices.

The goal must be to do no harm, but this goal is not met in this legislation.

General Leave

Mr. Speaker, I have a motion to recommit at the desk.

In its current form, yes, sir.

Mr. Speaker, as I indicated in my earlier comments here on the House floor concerning this legislation, I think our goal has been to make certain that we do no harm, and I have concerns that we will do harm with the legislation that's before us. And by harm, I don't mean harm to the industry, not speculators, not swap dealers, but harm to the consumers, harm to the American people, harm to the United States economy.

One of those concerns we have is concern with those who have invested their retirement in pension funds. And so this motion to recommit simply is a requirement that CFTC, before they impose those position limitations, would make certain, would certify that the imposition of those payment limitations would not reduce the value of a person's pension fund.

The effort here is to make certain that no harm is caused, a goal I'm sure we all share, and in particular, make certain that we know what we are doing does not damage the value of the American people's retirement accounts.

Mr. Speaker, I yield to the gentleman from Virginia.

Mr. Speaker, again, I would ask the House of Representatives to approve our motion to recommit.

Again, as the gentleman from Virginia says, we believe there's a better policy that hasn't even been debated upon the House floor in dealing with energy prices than the bill that's before us today. That's the American Energy Act. We wish that motion could be made in order today so that we could have a clear debate and vote upon the issue that is compelling to the American people and damaging to the United States economy.

In lieu of that, we would ask that we take this additional step to make certain no unintended consequences occur and we protect the retirement accounts, the pension accounts of Americans.

I yield back my time.

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

Mr. Speaker, pursuant to House Resolution 1449, I call up the bill (H.R. 6604) to amend the Commodity Exchange Act to bring greater transparency and accountability to commodity markets, and for other purposes, and ask for its immediate consideration.

Mr. Speaker, H.R. 6604, the Commodity Markets Transparency and Accountability Act of 2008, will strengthen oversight of the Commodity Futures Market for energy and agricultural commodities. This bill will be almost entirely identical to the version that we considered under suspension here on July 30, 2008.

There are two changes that are purely technical and corrected typographical errors, and there are two other changes that we made in the bill to make sure the provisions are entirely within the jurisdiction of the Agriculture Committee.

One strikes section 10(b) regarding the Inspector General of the CFTC. The other, section 13(b) is modified so the Commodity Futures Trading Commission does the reference study instead of the Comptroller General.

Mr. Speaker, on this bill we have gotten more information in the committee, and Mr. Etheridge had a hearing that he chaired last week.

I would at this time yield 5 minutes to the gentleman from North Carolina (Mr. Etheridge) who has been working with me tirelessly on this to talk about the process and explain the bill.

Mr. Speaker, I yield the gentleman another 30 seconds.

I want to take a second to commend my ranking member for the outstanding work that did he with us on a bipartisan basis in this committee to bring this bill forward. We take our jurisdiction very seriously, and we think we have produced a good product.

Mr. Speaker, I am now pleased to recognize the gentleman from Connecticut (Mr. Courtney) for 1 minute.

Mr. Speaker, I am pleased now to yield 2 minutes to the gentleman from Vermont (Mr. Welch) who has been a leader on this issue.

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. 6604.

Mr. Speaker, we saw the information, and some of us became convinced all the more that the bill we have put on the floor is the appropriate bill.

I now yield 3 minutes to the gentleman from Maryland (Mr. Van Hollen), one of our leaders and a leader on this issue.

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

As I said when we first considered this bill in July, this is a great bipartisan effort that Mr. Goodlatte and I have worked on. This bill addresses the realization that the trading volume and the futures market for physical commodities has increased dramatically in recent years. This increase includes vast amounts of capital from parties that are not traditional futures market participants, and this has been my concern, these participants, such as the index funds, pension funds, and some hedge funds.

The presence of this additional capital has raised concerns in our committee that the resulting futures market prices may not accurately represent the forces of supply and demand, nor may they fundamentally support at the local selling points where those in the producing and selling of the commodities are doing business.

Mr. Speaker, this debate is more than just the presence of speculators in the futures market. As I said on the floor in July, this lack of convergence--and this is one of the big problems that I am concerned about--the lack of convergence that we're getting in some of these agricultural markets where we have a $2.40 difference between the futures price and the actual cash price of wheat in some of our markets, these are the things that really concerns us on the committee.

So we have put forward transparency so that we know what's going on in these markets, and we're giving the authority for some position limits on these nontraditional investments that were created that really have nothing to do with the underlying commodity market. And in my opinion, the more I learn about this, I think this has some effect on why we're not getting convergence in those markets.

We believe this is a modest step that addresses the concerns that have been identified to the committee, and we're going to continue to work on this. We're going to continue to get information from the CFTC and other sources as to what is going on in these markets, and we will see how this progresses through this Congress.

But I can tell people if this is not resolved in this Congress, we will take this up in the next Congress to address these issues.

With that, Mr. Speaker, I will reserve the balance of my time.

Mr. Speaker, I am now pleased to recognize

the vice chairman of our caucus and the leader on this issue, the gentleman from Connecticut (Mr. Larson) for 2 minutes.

Mr. Speaker, again I want to thank my good friend, Mr. Goodlatte, for the great work he did with us on this bill. Like any bill, it's not perfect but it's, I think, a step in the right direction. We take very seriously our responsibility and the jurisdiction that we have in making sure that the CFTC is doing the proper oversight, the proper job, and that we're getting convergence of these markets so that they work for people that need them on a day-to- day basis.

This is almost the exact same bill that received 275 votes on a bipartisan basis on July 30. At one time we were up to 291 votes. At one time we had two-thirds, but it eroded away. I'm confident today that we will have the support to move this bill through the House, and hopefully our friends in the other body will move because I believe we have uncovered some things that need to be addressed in legislation, and we are doing that in this legislation.

With that, Mr. Speaker, I ask everybody to support the bill.

I yield back the balance of my time.

Mr. Speaker, I rise in opposition to the motion.

Mr. Speaker, first of all, we were delayed in getting something done with this bill back in July when, at one time, we had the votes to pass this under suspension, and then the votes eroded away. This is going to delay the process again. And beyond delay because it says ``promptly,'' it will have the effect of us not being able to move this bill in the House before we're out of here for the elections.

As chairman of the committee and somebody that's worked on this, I disagree with that. I think we need to move this, irrespective of whatever's going to happen in the other body or with the administration. I think this has the effect of killing the bill because we won't have the time to deal with this.

Lastly, I think the CFTC has the ability to do this under the legislation. Apparently Mr. Moran doesn't trust the CFTC. We have people over here that don't trust the CFTC, but I think they could deal with this. I don't think there's anything that precludes them from accomplishing this in the underlying legislation.

I would ask people to oppose the motion, and I would say that I believe this kills the bill for this session.

I yield back my time.

I thank the chairman.

I am pleased today to join Chairman Peterson and Ranking Member Goodlatte in bringing this legislation, the Commodity Markets Transparency and Accountability Act of 2008, to the floor for consideration by the House.

Mr. Speaker, since our bill was considered by the full House this past July, much has happened. For one thing, oil prices have dropped, and they have dropped considerably. They have gone up in the last day or so. Additionally, the CFTC has released a report providing the most detailed and accurate look at data on index trading and swap dealers participating in the over-the-counter market.

While all of us are glad to see the prices of oil decline and other commodities in recent months, it does not relieve the Commission or this Congress of our responsibility to make sure that commodity markets are operating effectively, efficiently and fairly. And

while the CFTC report indicates that index funds and swap dealers have less influence on our markets than had otherwise been reported, the report does not tell us the whole story or provide us with all the answers to our questions regarding these markets.

The CFTC report fails to include the time period of this July and August and recent weeks when oil prices fell fairly rapidly. Do we have a clear understanding of why prices fell? No. Passing H.R. 6604 will provide the CFTC with the authority and the tools to examine the entire marketplace to ensure no individual group or groups of market participants is having an undue influence on the market.

Months ago, the CFTC was telling Congress that it needed no additional changes to the Commodity Exchange Act and that markets were functioning properly. Now the CFTC's report contains a host of proposals very similar to the provisions in the Commodities Market Transparency and Accountability Act.

The report recommends measures designed to enhance transparency and data accuracy for commodity markets. Our bill provides the commission with the tools to make that happen.

The report suggests revising the hedge exemption rules that allow traders to exceed speculation position limits. Our bill accomplishes that too.

The report highlights the desperate need for additional staff and resources at the CFTC, not only to accomplish its current mission, but also to implement its recommendations to bring greater transparency and accountability to the commodity markets. We happen to agree.

Since 2000, volume on the commodity markets has increased sixfold, but currently staffing levels at the CFTC have fallen to their lowest level in the 33-year history of the Commodities Exchange. Through this legislation, we acknowledge the need for 100 additional full-time positions at CFTC that they need to effectively regulate the futures industry, including our energy markets. But we should not kid ourselves. The CFTC needs far more resources to do the job that we expect them to do.

Earlier this year the chairman of the CFTC testified at a hearing that the agency needed 100 additional staff right now just to meet the growing surveillance needs.

In testimony presented to the House Agriculture Committee a week ago today, the chairman of the commission testified the CFTC would need still another 138 full-time staff and $38 million just in 2009 to implement the provisions of H.R. 6604. Given the light of what is happening in the markets, I think we understand why the need is there.

I have said this before, but it bears repeating, if Congress places additional responsibility upon the Commission, without providing the resources necessary to meet those responsibilities, then what we pass here today is simply a farce. Through its report, CFTC views on effective oversight of commodity markets have changed dramatically from where the commission was previously.

I know some of my colleagues will say let's wait and give the commission time to implement these recommendations administratively. I say why wait for the commission to implement changes that we as a Congress can do right now with H.R. 6604.

We can all agree that no one factor is responsible for the movement we have seen in agriculture and energy prices, but this legislation is an important measure to provide the CFTC with additional tools and authority to keep our markets free of manipulation and excess speculation and help restore confidence to these markets. We cannot allow excess speculation by Wall Street to cause folks on Main Street to suffer.

I urge my colleagues to support this legislation.

We have just a couple more speakers we are waiting on, but in the meantime I would take this opportunity, Mr. Speaker, to just share with my colleagues that this bill has substantial support from the Air Transportation Association, the Air Line Pilots Association, Tyson Foods, Sierra Club, Environmental America, League of Conservation Voters, the Wilderness Society, National Chicken Council, National Corn Growers Association, National Cotton Council, National Farmer Unions, National Grains, National Milk Producers Federation, National Sorghum Producers, Southern Cotton Shippers Association, Southern Peanut Farmers Association, Southwest Council of Agriculture, Texas Cotton Association, United Egg Producers, United States Cattlemen Association, U.S. Rice Producers Association, U.S. Rice Federation, Western Cotton Shippers, Western Peanut Growers Association, Women Involved in Farm Economics, the American Agriculture Movement, American Association of Crop Insurance, American Corn Growers, American Cotton Shippers, the Atlantic Cotton Association, the Minnesota Corn Growers Association, National Association of State Departments of Agriculture, and I think at the end of the day, Mr. Speaker, the American people.

The American people only ask of us in this body to do what's right and be fair. I think they want markets to work. They want them to work fairly because they don't want them working against us. Today we have an opportunity to make these markets, once again, work for the American people.

We heard testimony in our committee of grain elevators who were caught in the wedge. When the prices ran so high, they were unable to get financing to be able to assist farmers. When you're looking at finding a real price through the futures, that's what they're supposed to do. But you can't do it when the markets aren't working the way they should work.

Mr. Speaker, if the gentleman from Virginia has any other speakers, I would be willing for him to call his speakers while I wait for a couple of folks here.

I would be happy to yield.

I am prepared to close, unless we get one more speaker. If you will go ahead and proceed, and then as soon as our speaker comes, I will let them do it and I'll close.

I reserve the balance of my time.

Mr. Speaker, I ask for a time check.

Mr. Speaker, I yield 4 minutes to the gentlelady from Connecticut, someone who has worked hard in this area, Representative DeLauro.

Mr. Speaker, H.R. 6604, the ``Commodity Markets Transparency and Accountability Act'' will help restore integrity to commodity futures markets. Lax regulation has allowed prices to become divorced from fundamental supply and demand. Lax regulation has allowed speculative bubbles to form in food and energy prices. And lax regulation has caused billions of dollars in damage to businesses and consumers.

Oil prices doubled from $72 per barrel on July 11, 2007, to $145 on July 11, 2008, even though supply and demand was fundamentally unchanged. While excess capacity was reduced and the dollar had dropped, there were no oil shortages, and inventories were ample. Fundamentals alone do not explain a 100 percent price increase.

What has changed over the past few years is that oil has been transformed from a basic commodity into a financial asset, and traded for its speculative value by institutional investors who want to diversify portfolios, hedge the dollar, or make a fast buck. The Washington Post reports that speculators control as much as 81 percent of the futures market, up from an estimated 37 percent in 2000.

Investment banks and futures exchanges claim that institutional investors are providing badly needed liquidity to the futures market, that futures prices reflect supply and demand, and Congress should not turn them into a scapegoat.

Wall Street's commodity brokers told their investors privately, however, that supply and demand did not explain the doubling of oil prices.

Just yesterday, Michael Cembalest, J.P. Morgan's global chief investment officer, wrote:

the Peak Oil crowd promoting crude oil . . . at $200 should

concede what we've been saying: there was an enormous amount

of speculation pent up in energy markets (e.g., an 8-fold

increase in bank OTC oil derivative exposure in the last 3

years), and it wasn't just the supply-demand equation. Oil

will rise again, and we need solutions to energy supplies,

but $140 in July 2008 was ridiculous.

Yet on the same day, Blythe Masters, Managing Director and Head of Global Commodities for J.P. Morgan submitted testimony before the Senate Energy Committee stating:

we fundamentally believe that high energy prices are a

result of supply and demand, not excessive speculation.

Lehman Brothers told its investors in May that it is seeing ``the classic ingredients of an asset bubble'' in oil. It linked it to an inflow of $90 billion in commodity index investments.

The cost to our economy from excessive speculation is destructive.

For every penny increase in the price of a gallon of gasoline, consumer costs jump by $1 billion a year, according to Moody'sEconomy.com. The run-up since last September has added nearly $1 per gallon, costing consumers $100 billion absorbing the

economic stimulus package enacted earlier this year.

The Industrial Energy Consumers indicate that natural gas consumers paid an extra $40.4 billion this year already. They support this bill.

The airlines have lost 36,000 jobs and retired 746 planes this year, while eliminating 635 routes, due to jet fuel prices. They support this bill.

Petroleum marketers have seen oil prices come unhinged from supply and demand. They support this bill.

Some institutional investors are now starting to unwind their massive positions. Nearly 127 million barrels of oil futures valued at $40 billion were liquidated by institutional investors between July 15, 2008, and September 2, 2008, according to a recent analysis of the CFTC's public data. Oil futures prices plunged $53 per barrel to $92 in only two months, yet fundamental supply and demand was not changed materially in the past 60 days.

What did change in mid July is that Congress in both Houses took up legislation to rein in excessive speculation--particularly in the unregulated dark markets--which may have spurred some speculators to get out early.

The central issue is whether pension funds, endowments, and sovereign wealth funds should be allowed to hijack commodity markets and set oil and food prices, or whether consumers and producers should set prices based on supply and demand. If speculators can drive prices back up to $140, they can really turn the lights out on the U.S. economy.

Some may argue that given the crisis in financial markets, this is not the time to start regulating Wall Street. Beginning with the repeal of the Glass-Steagall Act, however, deregulation has allowed recklessness to compromise our entire financial system.

The recent collapse of Fannie Mae, Freddie Mac, Bear Stearns, AIG, and Lehman Brothers are a product of lax regulation which has led to systemic risk for the entire financial system.

This legislation puts a cop on the beat and codifies some of the transparency measures recently recommended by the CFTC. I commend Chairman Peterson and Etheridge, as well as Representatives Stupak, Van Hollen, DeLauro, and Larson for their leadership on forging this bill and urge its passage.