[Tru2Chevy]

I got an email from Rush Holt:

Dear Mr. Bowers:



Thank you for contacting me about oil speculation. I appreciate hearing from you, and I apologize for the delay in my reply.



As you may know, the speculation in energy markets has been identified as one of the principle causes of the increase in the price of oil. As American consumers continue to pay nearly $4 at the pump, speculators in the energy marketplace are making millions in the commodities and futures markets. Experts have testified in Congress that speculation in the marketplace has increased the price of oil by $20 to $60 per barrel, and the International Monetary Fund recently concluded that "speculation has played a significant role in the run up in energy prices."



The government body in charge of regulating commodities is the Commodities Futures Trading Commission (CFTC), which Congress established in 1974 to prevent fraudulent futures transactions. However, loopholes in current law prevent the CFTC from being an effective regulatory agency. In 2000, the CFTC was made less effective by the passage of the Commodities Futures Modernization Act which included energy in the class of commodities exempt from CFTC regulation. Exempt commodities can be traded in the Over the Counter (OTC) market without regulation as long as small investors do not participate. The so called "Enron-loophole" and a lack of regulation of the marketplace have caused deceptive trading practices to flourish, including creating the artificial appearance of demand to drive up energy prices. In fact, a recent report by Lehman Brothers estimates that that up to 50 percent of the price of a barrel of oil can be attributed to speculation in the energy futures marketplace.



On July 30, 2008, the House of Representatives considered H.R. 6604, the Commodity Market Transparency and Accountability Act, legislation which would take dramatic steps to curb excessive oil speculation. H.R. 6604 would make off-shore commodities markets subject to the same rules and regulations as United States markets. It would close the "Enron Loophole" by giving the CFTC the ability to regulate the OTC market. It would limit the size of the stake that a single investor can hold in a given market. H.R. 6604 also would expand the CFTC so that it would have more resources for regulating the commodities marketplace and create an independent office of the Inspector General of the CFTC. I supported the Commodity Market Transparency and Accountability Act. However, many of my Republican colleagues did not support this legislation and it failed to pass under a rule which required a two-thirds majority by a vote of 276 - 151.



I recently supported H.R. 6377, the Energy Markets Emergency Act of 2008, which would help the CFTC prosecute excessive speculation, price distortion, unwarranted changes in prices, or other unlawful activities that are causing major disturbances in the oil market. This bill passed the House with my support and is pending consideration in the Senate. I have attached a copy of my remarks on this bill that you might find to be of interest.



Several other bills have been introduced in the 110th Congress to strengthen the CFTC and to increase regulation of energy commodity markets. Rep. Bart Stupak (D-MI) has introduced H.R. 594, the Prevent Unfair Manipulation of Prices Act of 2007, which would amend the CEA to allow it to regulate energy transactions made in an electronic trading facility, as well as energy commodities traded in OTC transactions. Another bill, H.R. 4066, the Close the Enron Loophole Act, introduced by Rep. Peter Welch (D-VT), would require the reporting of large positions in energy commodity trading in the OTC market and on foreign markets that can be accessed by terminals based in the United States. This bill would also extend the ability of the CFTC to regulate the trading of exempt commodities on an energy trading center's electronic trading facility. Both of these bills have been referred to the House Committee on Agriculture for further consideration.



Again thank you for contacting me. As the House of Representatives continues to work on this issue, I will be sure to keep your thoughts in mind.

Sincerely,

RUSH HOLT

Member of Congress

I have the .pdf with his comments that I'll send to anyone who may be interested....

- Justin