I 

111TH CONGRESS 

1ST SESSION H. R. 2869 

To require the Commodity Futures Trading Commission to take certain 

actions to prevent the manipulation of energy markets, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 15, 2009 

Mr. DEFAZIO (for himself and Mr. WELCH) introduced the following bill; 

which was referred to the Committee on Agriculture 

A BILL 

To require the Commodity Futures Trading Commission to 

take certain actions to prevent the manipulation of energy markets, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Energy Market Manip5 ulation Prevention Act’’. 

6 SEC. 2. ENERGY MARKET MANIPULATION PREVENTION. 

7 (a) FINDINGS.—Congress finds that— 

8 (1) in 1974, the Commodity Futures Trading 

9 Commission (referred to in this Act as the ‘‘ComVerDate Nov 24 2008 22:51 Jun 16, 2009 Jkt 079200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2869.IH H2869

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1 mission’’) was established as an independent agency 

2 with a mandate— 

3 (A) to enforce and administer the Com4 modity Exchange Act (7 U.S.C. 1 et seq.); 

5 (B) to ensure market integrity; 

6 (C) to protect market users from fraud 

7 and abusive trading practices; and 

8 (D) to prevent and prosecute manipulation 

9 of the price of any covered commodity in inter10 state commerce; 

11 (2) Congress has given the Commission author12 ity under the Commodity Exchange Act (7 U.S.C. 1 

13 et seq.) to take necessary actions to address market 

14 emergencies; 

15 (3) the Commission may use the emergency au16 thority of the Commission with respect to any major 

17 market disturbance that prevents the market from 

18 accurately reflecting the forces of supply and de19 mand for a covered commodity; 

20 (4) in section 4a(a) of the Commodity Ex21 change Act (7 U.S.C. 6a(a)), Congress has declared 

22 that excessive speculation imposes an undue and un23 necessary burden on interstate commerce; 


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1 (5) in May 2009, crude oil inventories in the 

2 United States were at the highest level of crude oil 

3 inventories on record; 

4 (6) in May 2009, demand for oil in the United 

5 States dropped to the lowest level of demand in 

6 more than a decade; 

7 (7) the national average price of a gallon of 

8 gasoline has jumped from $1.64 per gallon in late 

9 December of 2008 to over $2.61 per gallon as of 

10 June 8, 2009; 

11 (8) crude oil prices have increased by over 70 

12 percent since the middle of January 2009; and 

13 (9) in May 2009, the International Energy 

14 Agency predicted that global demand for oil will de15 crease in 2009 to the lowest level of demand since 

16 1981. 

17 (b) DUTIES OF COMMISSION.—The Commission shall 

18 use the authority of the Commission, including the emer19 gency authority of the Commission— 

20 (1) to curb immediately the role of excessive 

21 speculation in any contract market— 

22 (A) that is within the jurisdiction and con23 trol of the Commission; and 

24 (B) on or through which energy futures or 

25 swaps are traded; 


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1 (2) to eliminate excessive speculation, price dis2 tortion, sudden or unreasonable fluctuations or un3 warranted changes in prices, or other unlawful activ4 ity that causes major market disturbances that pre5 vent the market from accurately reflecting the forces 

6 of supply and demand for energy commodities; 

7 (3) to classify immediately each bank holding 

8 company that engages in energy futures trading as 

9 a noncommercial participant, and subject the bank 

10 holding company to strict position limits; 

11 (4) to require immediately that each hedge fund 

12 engaged in the trading of energy futures for the 

13 hedge fund, or on behalf of a client of the hedge 

14 fund— 

15 (A) to register with the Commission as a 

16 noncommercial participant; and 

17 (B) to be subject to strict speculation lim18 its; 

19 (5) to eliminate conflicts of interest that may 

20 arise in situations during which 1 entity owns or 

21 controls a unit that is— 

22 (A) designed to predict the future price of 

23 oil; 

24 (B) engaged in the operations of oil assets, 

25 including pipelines and storage facilities; and 


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1 (C) engaged in the buying or selling of en2 ergy derivatives for the unit, or on behalf of a 

3 client of the unit; and 

4 (6) to revoke immediately each staff no-action 

5 letter that covers a foreign board of trade that has 

6 established trading terminals in the United States 

7 for the purpose of trading United States commod8 ities to United States investors. 

Æ 


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