OVERNIGHT ENERGY: Senate Dems turn up the heat on CFTC over oil speculation

State of Play: Senate Democrats blasted the chairman of the Commodity Futures Trading Commission Thursday, arguing he is not moving quickly enough to impose new limits on investors in oil markets aimed at curbing “excessive” speculation. Such speculation, the lawmakers argue, is pushing up oil and gasoline prices.

“There is nothing that I heard from him which suggests any sense of urgency about the need to protect consumers or, in fact, to protect our economy,” Sen. Bernie Sanders (I-Vt.) said Thursday after a meeting with CFTC Chairman Gary Gensler.

“I was disappointed by the tone of the meeting, the lack of urgency, the lack of specific ideas, and that’s something we’re just going to have to deal with.”

Democrats have turned up the heat on the CFTC in recent weeks as high gas prices remain at the top of the congressional agenda. They blame oil market speculation for high prices and say the CFTC limits will temper pain at the pump.

Seven Senate Democrats, led by Sanders, met with Gensler in Sanders's office Thursday afternoon to call for the immediate implementation of regulations imposing position limits, or caps on the number of futures contracts that a market player may hold, in crude oil markets.

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The CFTC proposed reworked limits in January based on provisions in the Dodd-Frank financial reform bill that required the commission to implement aggregate position limits on energy commodities. But the CFTC has yet to finalize the rules even though the Wall Street reform law called for their completion within 180 days of enactment.

“All the senators present feel that Dodd-Frank provided the authority and power to the CFTC to get speculators out of the oil markets, that that’s very important to the economy, and the action by the CFTC is way too slow,” Sen. Jeff Merkley (D-Ore.), who also attended the meeting with Gensler, told The Hill. “They are in violation of the law at this point.”

Sen. Maria Cantwell (D-Wash.) said Thursday that the senators are trying to determine what action they can take to ensure the CFTC rules are finalized, but she declined to offer specifics about the lawmakers’ plans.

Cantwell said the lawmakers have reached out to the White House for help. “We want to make sure the executive branch is expressing its opinion,” Cantwell told reporters.

Gensler, for his part, declined to talk to reporters after the meeting.

The meeting comes just days after Gensler responded to a May 11 letter from 17 lawmakers — including one Republican, Sen. Susan Collins (R-Maine) – calling on the CFTC to take “decisive action” to finalize the rules.

Gensler said the regulations would not be finalized until the CFTC is able to go through 12,000 comments on the rules.

“The Commission has dedicated significant staff resources to reading and summarizing the comment letters, and staff is working to complete reviewing comments shortly,” Gensler said in a written response Monday. “The Commission will begin considering a final rulemaking after staff can analyze, summarize and consider comments and after the Commissioners are able to discuss the comments and provide feedback to staff.”

Sens. Bill Nelson (Fla.), Ron Wyden (Ore), Amy Klobuchar (Minn.) and Mark Udall (Colo.) also attended the meeting with Gensler Thursday afternoon.

The calls by Democrats to reel in speculation contrast with the push by Republicans to expand offshore drilling and underscore the uphill battle lawmakers face in passing any legislation aimed at lowering prices.

With the prospects for the passage of legislation murky, lawmakers on both sides of the aisle have found themselves in a political messaging war on gas prices as the summer driving season switches into high gear.

But the extent to which speculative trading influences energy prices is a matter of debate, and energy analysts say expanded domestic oil production will have little effect on prices.


NEWS BITES:

Senate Energy panel approves bills, but still no agreement on drilling bills: The Senate Energy and Natural Resources Committee approved five energy bills Thursday.

But the panel did not complete its consideration of legislation to create a “clean-energy deployment administration” that would expand federal financing options for the development of various low-carbon energy technologies.

That legislation, as well as a broad offshore drilling-safety measure and a bill related to oil and gas production, will not come up in the panel until at least June.

As The Hill reported Thursday, the panel’s ranking Republican, Sen. Lisa Murkowski (R-Alaska), has not yet thrown her support behind the two drilling measures.

The measures approved by the panel Thursday include a bill to boost research and development of marine renewable energy sources like wave power, and to bolster federal programs aimed at speeding deployment of carbon capture and storage technologies.

Dems call for ‘fracking’ hearing: Top Democrats on the House Energy and Commerce Committee called on their Republican colleagues Thursday to hold a hearing on a controversial natural-gas production process called hydraulic fracturing, or “fracking.”

“While hydraulic fracturing and the increased use of natural gas hold great promise, it is essential that the technique be adequately regulated to prevent risks to health and the environment. A Committee hearing would give members a better understanding of these issues and an opportunity to assess the need for appropriate legislation,” the Democrats said in a letter to the top Republicans on the panel.

The letter was sent by Reps. Henry Waxman (D-Calif.), the top Democrat on the panel, Diana DeGette (D-Colo.), the ranking Democrat on the Oversight and Investigations subcommittee, and Rep. Edward Markey (D-Mass.), the ranking Democrat on the House Natural Resources Committee.

Fracking is a natural-gas extraction process in which water, sand and chemicals are injected into the ground to loosen valuable natural gas reserves. Environmental groups and some Democrats have raised concerns that the process causes environmental damage and could harm drinking water supplies.

Stearns: Sunstein ignored call for preview of reg review plans: Rep. Cliff Stearns (R-Fla.), the chairman of the House Energy and Commerce Committee’s Oversight and Investigations subcommittee, is not pleased with White House regulatory point man Cass Sunstein.

Stearns called on Sunstein to provide Republicans with a preview of the Obama administration’s regulatory review plans by May 24. But Stearns says Sunstein, the administrator of the Office of Information and Regulatory Affairs, didn’t comply with the request.

“My message to Mr. Sunstein and the Obama administration is that congressional inquiries are not optional,” Stearns said in a statement Thursday. “It is astonishing that despite this administration’s repeated claims of transparency, it continues to ignore and defy basic requests for information.”

The administration released 30 reports Thursday aimed at streamlining agency regulations.

Murkowski unveils bill aimed at increasing U.S. supply of 'critical' minerals: Sen. Lisa Murkowski (R-Alaska) introduced legislation Thursday aimed at increasing the country’s domestic supply of critical minerals.

The bill, which is co-sponsored by a slew of Republicans and Democrats, would instruct the U.S. Geological Survey to determine which minerals are critical to the country and develop a plan to ensure the country has adequate supplies of those minerals.

Lawmakers have become increasingly concerned with the country’s lack of domestic supplies of rare-earth minerals, which are essential for the production of various clean-energy technologies like wind turbines and electric vehicles. China currently provides around 97 percent of the world’s rare earth supplies.

House lawmakers introduced companion legislation Thursday.


ON TAP THURSDAY:

The International Energy Agency will hold a conference call on its report, "Climate and Electricity Annual — Data and Analyses."

The Energy Department will hold Day Four of its Energy Frontier Research Centers Summit and forum.


IN CASE YOU MISSED IT...

Here's a quick roundup of Thursday's E2 stories:

— Regulatory review plans: A look at EPA, DOI and DOE
— Landrieu: Oil-liability measure bogged down by ‘technical’ woes
— Christie pulls New Jersey out of greenhouse-gas accord
— Boxer plans hearing on new climate report
— BlueGreen Alliance, Apollo Alliance merge
— O’Malley hits Christie for ditching cap-and-trade program
— Several House Republicans are backing off T. Boone Pickens's natural-gas vehicles plan

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