Washington, D.C.-The Energy Market Oversight Coalition (EMOC), whose members include the Agricultural Retailers Association and roughly 70 other business and trade associations, sent a letter on Sept. 4 to every U.S. Senator and Representative urging their support for greater transparency and accountability in the over-the-counter (OTC) energy commodity markets. The letter states that “excessive speculation and alleged manipulation in such markets have held American consumers and small businesses – and the economy at-large – hostage to unprecedented price volatility and uncertainty for far too long.” As one example, the letter cites a Senate Permanent Subcommittee on Investigations report, released on June 25 and entitled Excessive Speculation in the Natural Gas Market, which highlights price manipulation carried out by Amaranth Advisors LLC in 2006. The report, the letter states, concluded that price distortions in the natural gas market resulting from Amaranth’s “excessive speculation” was evidence of “a broken regulatory system that has left our energy markets vulnerable to any trader with sufficient resources to alter energy prices for all market participants.” Although enforcement actions and nearly a half-billion dollars in fines were levied against Amaranth by the Federal Energy Regulatory Commission, the EMOC letter says more should be done, including strengthening the Commodity Futures Trading Commission and giving it the statutory and financial resources needed to carry out “much needed oversight of the unregulated OTC markets.” Specifically, the letter urges Congress to fully fund the CFTC with $116 million in fiscal year 2008; close a loophole that allows unregulated trading on energy exchanges; give the CFTC “regulatory authority over all electronic trading mechanisms, and subject them to the same regulatory mandates as designated contract markets, such as the New York Mercantile Exchange;” include small business and consumer representation on all CFTC advisory committees; carefully review future nominations to the CFTC; and “hold energy market players and regulators accountable, and encourage rigorous enforcement and oversight of all commodity markets.” The CFTC has scheduled a Sept. 18 hearing in Washington, D.C., to examine oversight of trading on regulated futures exchanges and exempt commercial markets.
Transparency Across the Fertilizer Value-Chain