With sub-zero temperatures gripping parts of the country, natural gas costs are on the mind of many American families and businesses. It’s also an issue to which the Senate Energy Committee will pay close attention in the 110th Congress — a priority Chairman Bingaman signaled yesterday in twin letters to the nation’s top cops for ensuring fair natural gas prices.
In the wake of the Enron mess, the Energy Policy Act of 2005 contained bipartisan provisions aimed at cracking down on market manipulation when it comes to physical energy supplies. It also directed the Federal Energy Regulatory Commission (FERC) and Commodity Futures Trading Commission (CFTC) — the two agencies responsible for monitoring natural gas markets — to work together and share information, so the Feds would have a more complete picture of these market dynamics.
Since then, we’ve witnessed continued volatility in energy commodity prices, and the collapse last fall of Amaranth Advisors LLC, a hedge fund that held a large position in financial natural gas markets. Meanwhile, a variety of stakeholders have brought to the Committee’s attention their concerns about how speculative trading in financial markets may be impacting the natural gas costs paid by end-users throughout the country ) — from families struggling to pay heating bills, to major manufacturers, to farmers grappling with fertilizer costs.
In his letters to the heads of FERC and the CFTC, Chairman Bingaman asks a series of questions designed to assess the manner in which the agencies are implementing their new EPACT authorities, particularly in view of trading activities potentially impacting natural gas supply costs and Amaranth’s collapse. The Energy Committee takes seriously its oversight responsibilities, and looks forward to working with the agencies on these issues given their importance to consumers across the nation.
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