5-15-08 by dugan
The sweeping farm bill that passed the Senate today and is headed for President Bush’s desk is more pork than policy, but I’m still celebrating. OilWatchdog’s most-wanted bill to curb energy speculation was tucked into the farm legislation. The measure, now almost certain to become law, will close the so-called Enron Loophole, regulating electronic and over-the-counter energy trading that helped bring us $125-a-barrel oil. Lack of regulation made oil and natural gas trading open to price manipulation, and lack of oversight made shenanigans impossible to find. Sen. Dianne Feinstein of California, who has tried to close the loophole for years, talked to the San Francisco Chronicle about the farm bill and her victory:
Feinstein said she does not
support the $2.5 million annual income limit the bill sets for cutting
off crop subsidies to farm couples but that the bill was supported by
all agriculture groups in California.
Feinstein was thrilled about a provision she added that closes what
she called the "Enron loophole" in energy trading on electronic
platforms. The new measure extends federal regulatory oversight to
electronic energy trading and requires record keeping that would end
what she called excessive speculation.
Feinstein said she has fought for the measure since California’s
electricity crisis in 2001. "This has been a long, hard road and this
is a major legislative victory," Feinstein said.
Getting a handle on unregulated, Wild West energy trading, and the resulting $125-a-barrel oil prices, won’t be fast or easy. Part of the problem is that the regulators at the Commodity Futures Trading Commission have been short on staff, funding and authority under the current administration. The Enron Loophole bill will also boost the CFTC budget, so Feinstein deserves major credit for her tenacity and wiliness in gettng the measure passed.
I had wondered about the wisdom of tucking the energy trading measure into the farm bill, and worried that it might be traded away for somebody’s pork. But the bill as a whole now has a veto-proof majority in Congress, so the Enron loophole is toast, no matter what the oil and hedge fund buddies at the White House think. For some details on what Feinstein’s measure will do, click here. And for more on OilWatchdog’s analysis of the loophole, click here.