Cantwell Celebrates New Laws Stopping Oil Price Manipulation

Cantwell's Push for Greater Transparency and Oversight in Energy Markets Pays Off; "Enron" Loophole Closed

WASHINGTON, DC– Friday, U.S. Senator Maria Cantwell (D-WA) celebrated passage of two independent measures that will protect consumers from energy market manipulation.  The two measures were included in the Energy Bill (HR 6) and the Farm Bill (HR 2419) which passed the Senate this week. Cantwell has worked since the western energy crisis in 2001 to get full transparency and accountability applied to all of America’s energy markets. The two Cantwell-backed pieces will help ensure that the federal government  has the tools and authority it needs to protect consumers from paying  inflated energy prices due to illegal speculation, manipulation, or hoarding in oil, gas, and electricity markets.
“Consumers are angry about high fuel prices. They what to know that manipulation of oil and gas prices won't be tolerated and perpetrators of these schemes will be brought to justice," said Cantwell, a member of the Senate Energy and Commerce Committees. “They deserve to know that there is a cop on the beat who will protect consumers and prevent energy market manipulation. The measures the Senate just passed will give the federal government the tools they need to ensure oversight and consumer safeguards apply to all energy markets. When gas prices are over $3.50 a gallon in some areas of the country and oil futures are soaring to near $100 per barrel, it’s no surprise that consumers are angry about high fuel prices.”
The landmark energy bill, passed by the Senate Thursday night, included language Cantwell authored giving the Federal Trade Commission (FTC) new authority to fine anyone who uses a manipulative or deceptive device or contrivance to distort the crude oil, gasoline, or petroleum distillate markets up to $1 million.  In the past six months several companies including Amaranth, Marathon, and BP have been under federal investigation for the manipulation of petroleum and natural gas markets.
Complementary language included in the Farm Bill Thursday closes the so-called “Enron loophole” through which some energy commodity markets were made exempt from government oversight. The loophole was created through a provision inserted by large energy traders into the Commodity Futures Modernization Act of 2000.  Earlier this week, Cantwell participated in a hearing at which oil industry experts testified that oil market speculation in the futures market is likely tacking on $20 to $30 to the price of a barrel of oil, and that current crude oil prices cannot be explained by normal supply and demand dynamics.   
“The days of Enron taught us the painful lesson that without bright lines dictating what practices are legal, market manipulation does happen and I don’t want American consumers to have to experience that again,” said Cantwell. "These new tools gives the Federal Trade Commission additional clout to stop manipulative oil market practices.  Closing loopholes exploited by companies to keep their actions beyond the reach of federal regulators is key to preventing market mischief in the future and ensure fair energy prices for American families and businesses. By requiring open books and transparent markets, we can catch patterns of irregular trading, stop dishonest energy traders, and avoid a repeat of the western energy crisis.”   
Over the years, Cantwell has worked tirelessly to increase transparency and root out manipulation in the energy markets, including securing anti-manipulation provisions in the Energy Policy Act of 2005 to provide Federal Energy Regulatory Commission (FERC) expanded authority over manipulation in the electricity market.  In addition, Cantwell introduced bipartisan anti-gas price gouging legislation in May that would have made price gouging in the oil and petroleum markets a federal crime.  Currently, 28 states have similar laws, but a federal ban is needed to truly prevent harmful market manipulation. While Cantwell was able to secure passage of this critical legislation as part of the Senate passed energy bill last July, it was forced out of the final bill passed yesterday because of a Presidential veto threat.    
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