RPF CFTC -- (Extensions of Remarks - April 10, 2008)
HON. RODNEY P. FRELINGHUYSEN
OF NEW JERSEY
IN THE HOUSE OF REPRESENTATIVES
THURSDAY, APRIL 10, 2008
* Mr. FRELINGHUYSEN. Madam Speaker, today I am introducing legislation that provides an important extension of the Commodity Exchange Act of 1934. This legislation focuses on energy transactions that perform a ``significant price discovery function.'' The legislation also addresses fraud and retail transactions in foreign exchange markets. It gives the Commodities Futures Trading Commission broader authority to prosecute fraud in other commodities such as heating oil.
* Americans have lost confidence in our energy markets--particularly in the futures market. I have spoken with many constituents who are skeptical about the price of gasoline and heating oil prices. Many consumers strongly suspect these prices are being manipulated.
* Over the past year, we have seen historical increases in the prices of gasoline and heating oil. Our colleagues in the Senate have done significant analysis on this issue, and their findings have been supported by reports published by the GAO and in the fall of last year.
* At the end of last year, Triple-A, AAA predicted that these spring months would see a decrease in oil and gas prices between the busy winter and summer travel seasons. Yet, prices remain around all-time highs, despite relatively constant inventory levels.
* Residents of New Jersey and throughout the country have struggled with heating bills, businesses are having difficulty with their electricity and transportation costs and this situation does not appear to be improving.
* To fix this situation requires complex answers, but it is becoming patently clear that speculation in the unregulated exempt commodities market is working to increase energy prices.
* Providing transparency to these dark markets is long overdue. Today, I ask that all of my colleagues will support this legislation, which is very closely aligned with a Senate Amendment to the Farm bill, which had bipartisan support and was passed by a voice vote.
* Quoting the Energy Market Oversight Coalition, ``To restore public confidence, all energy markets must be fair, orderly, and transparent so the prices paid by consumers reflect the true supply and demand.''
* In order for our futures markets to work, and our financial system as a whole, there is a pressing need for transparency. The CFTC exists for a specific reason and the work they do is vital to the operations of our economy. However, it cannot accomplish its mission if there are markets that it cannot monitor.
* This legislation addresses this troubling gap in the law and will ensure the solvency of our financial system and energy markets.