Bill to Stop Excessive Energy Speculation Voted Down in Senate

The full Senate voted on legislation intended to prevent price speculation in the oil markets on July 25.  Montana Sens. Baucus and Tester voted correctly, but the bill failed to reach the necessary 60 votes to end a Republican filibuster.

Senate Bill 3268, introduced by Senate Majority Leader Harry Reid (D-NV), would amend the Commodity Exchange Act to prohibit the wild oil speculation that occurs among commodity traders worldwide.  Energy market speculation - and not worldwide oil supply - is considered a chief cause of current high gas prices by many economists, lawmakers and energy experts.  

As reported on http://www.opencongress.org/, The Stop Excessive Energy Speculation Act of 2008 amends the Commodity Exchange Act to extend its coverage to energy commodities such as petroleum products and natural gas.  Furthermore, the measure prohibits the Commodity Futures Trading Commission (CFTC) from permitting a foreign board of trade to provide its members or other participants subject to CFTC jurisdiction direct access to its electronic trading and order matching system unless it meets specified requirements.

SB 3268 authorizes the CFTC to require recordkeeping by any person either located within the United States or entering trades directly into the trade matching system of a foreign board of trade from the United States. Subjects such persons to liability for violation of CFTC rules and regulations. Directs the CFTC to convene a working group of international regulators to develop uniform international reporting and regulatory standards to ensure protection of energy futures markets from non-legitimate hedge trading, excessive speculation, manipulation, location shopping, and lowest common dominator regulation, each of which poses systemic risks to all energy futures markets, countries, and consumers. Defines "legitimate hedge trading" as transactions by commercial producers and purchasers of actual physical petroleum and energy commodities for future delivery and the direct counterparties to such trades." 

Had the bill been signed into law, SB 3268 could have thwarted the current energy price betting and bring gas prices back down to reality.  Doing so could provide longer-term stability for consumers at the pump, versus blindly drilling for oil that may - or may not - hold oil reserves.