This week the House Agriculture Committee will hold three hearings to examine various legislative proposals that aim to prevent manipulation and excessive speculation in energy markets.
Among the proposals examined will be U.S. Rep. Bob Etheridge’s (D-Lillington) bill, H.R. 6334, The Increasing Transparency and Accountability in Oil Prices Act of 2008.
Etheridge is the Chair of the Subcommittee on General Farm Commodities and Risk Management of the Agriculture Committee, which has jurisdiction over the Commodity Futures Trading Commission, the government agency that is responsible for protecting the public from fraudulent practices in commodity futures trading, including oil and gasoline. Many experts believe that excessive speculation and market manipulation are partly to blame for the recent spike in energy prices.
H.R. 6334, The Increasing Transparency and Accountability in Oil Prices Act of 2008 will take three steps to ensure that energy prices are not being artificially increased by unfair market practices. First it will give the CFTC more resources to weed out potential manipulation and excessive speculation. Second, it will close the so-called “London-loophole” by giving the CFTC more authority over trading of U.S. energy commodities on overseas markets which are currently not regulated by a U.S. entity. Finally, the bill will require more disclosure and transparency from investors like index funds and swap dealers so the public can see, in the aggregate, how much these traders influence energy markets.