[Congressional Record Volume 154, Number 97 (Thursday, June 12, 2008)]
[Senate]
[Pages S5628-S5629]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DURBIN (for himself, Mr. Reid, Mr. Levin, Mr. Bingaman, 
        Mr. Dorgan, Mrs. Feinstein, Ms. Klobuchar, Mr. Menendez, Mr. 
        Brown, Mr. Casey, Mr. Kerry, Mr. Leahy, Mrs. Murray, Ms. 
        Mikulski, Mr. Obama, and Mr. Reed):
  S. 3130. A bill to provide energy price relief by authorizing greater 
resources and authority for the Commodity Futures Trading Commission, 
and for other purposes; to the Committee on Agriculture, Nutrition, and 
Forestry.
  Mr. DURBIN. Mr. President, I came to the floor at the beginning of 
this week to make a simple point: as oil prices have reached $139 per 
barrel in recent days, the truth is that no one--not the oil industry, 
not the futures exchanges, not the regulators, not even this United 
States Senator--knows exactly what's going on here.
  But with the economy in a tailspin and with the average price for a 
gallon of gas surpassing $4 and even higher across the country, it is 
time to find out.
  The chairman of the chief regulator of the futures markets, the 
Commodity Futures Trading Commission, doesn't seem to know either. In a 
recent appropriations subcommittee hearing I chaired, Chairman Lukken 
stated that ``CFTC staff analysis indicates that the current higher 
futures prices are generally not a result of manipulative forces.''
  Yet last Thursday and Friday the futures price of a barrel of oil 
shot up $16. In 2 days. Unless there was a massive pipeline explosion 
late last week that I somehow missed, there is simply no supply or 
demand justification for that kind of price increase.
  Something more is going on here.
  Is it rampant speculation that is causing the rise in oil prices?
  Is it illegal market manipulation?
  Is it the fact that the stock markets are not providing investors 
with decent returns at the moment, and so big investors are now pouring 
money into the futures markets instead?
  Is it the hugely deflated dollar exchange rate that is behind this?
  Is it that investors are worried about inflation and are using oil to 
hedge against that risk like they use to use gold?
  Is it really the rising demand of emerging economies like China and 
India that is causing the price of oil to rise?
  Is it the lack of true oversight into these markets that has 
encouraged institutional traders to take large speculative positions 
through overseas markets or over-the-counter trades, positions that 
they can't take in other markets?
  Is it the lack of portfolio caps that are in place for some futures 
contracts but not for oil that has encouraged institutional traders to 
take large speculative positions?
  The questions go on and on. And the answers are scarce. Given the 
importance of the price of gas to families in Illinois and across the 
country, I think that is scandalous.
  That's why I'm introducing a bill today entitled the ``Increasing 
Transparency and Accountability in Oil Prices Act.'' This bill would 
provide more people and better technology to the CFTC to help them 
better understand this situation. It also would give the CFTC far 
greater visibility to the traders and the transactions that are 
involved here.
  Specifically, this bill would:
  Authorize the CFTC to hire an additional 100 FTEs, and express the 
Sense of the Senate for the need for an emergency supplemental request 
from the President for this funding;
  Close the ``London loophole'' by treating oil traders located in 
London as if they were trading in the U.S. for regulatory purposes, so 
that the CFTC has access to oil trades on all exchanges rather than 
just the trades that take place physically in the U.S.;
  Require more detailed reporting to the CFTC for index funds and swap 
dealers who typically take long positions that might drive up the price 
of oil;
  Move the CFTC Inspector General out of the CFTC Chairman's office, to 
ensure its objectivity; and
  Initiate a GAO study of the existing international regulatory regime 
that should be preventing excessive speculation and manipulation of oil 
prices.
  Many of these ideas are not new. Senators Levin, Feinstein, Cantwell, 
and Dorgan have all been very active on these issues as have many 
others, and of course Chairman Bingaman and Chairman Harkin have been 
leaders on these regulatory issues for years.
  For my part, I intend to use my Chairmanship of the Appropriations 
Subcommittee on Financial Services and General Government to increase 
the funding and capacity of the CFTC. We will expect the agency to use 
these resources to get to the bottom of this.
  Quickly.
  These ideas--more regulatory resources and more market transparency--
are ideas that many of my colleagues might agree with. I encourage my 
colleagues on both sides of the aisle to support this important 
legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3130

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Increasing Transparency and 
     Accountability in Oil Prices Act of 2008''.

     SEC. 2. SENSE OF SENATE ON ADDITIONAL EMERGENCY FUNDING FOR 
                   COMMISSION.

       (a) Findings.--The Senate finds that--
       (1) excessive speculation may be adding significantly to 
     the price of oil and other energy commodities;
       (2) the public and Congress are concerned that private, 
     unregulated transactions and overseas exchange transactions 
     are not being adequately reviewed by any regulatory body;
       (3) an important Federal overseer of commodity speculation, 
     the Commodity Futures Trading Commission, has staffing levels 
     that have dropped to the lowest levels in the 33-year history 
     of the Commission; and
       (4) the acting Chairman of the Commission has said publicly 
     that an additional 100 employees are needed in light of the 
     inflow of trading volume.
       (b) Sense of Senate.--It is the sense of the Senate that 
     the President should immediately send to Congress a request 
     for emergency appropriations for fiscal year 2008 for the 
     Commodity Futures Trading Commission in an amount that is 
     sufficient--
       (1) to help restore public confidence in energy commodities 
     markets and Federal oversight of those markets;
       (2) to potentially impose limits on excessive speculation 
     that is increasing the price of oil, gasoline, diesel, and 
     other energy commodities;
       (3) to significantly improve the information technology 
     capabilities of the Commission to help the Commission 
     effectively regulate the energy futures markets; and
       (4) to fund at least 100 new full-time positions at the 
     Commission to oversee energy commodity market speculation and 
     to enforce the Commodity Exchange Act (7 U.S.C. 1 et seq.).

     SEC. 3. ADDITIONAL COMMISSION EMPLOYEES FOR IMPROVED 
                   ENFORCEMENT.

       Section 2(a)(7) of the Commodity Exchange Act (7 U.S.C. 
     2(a)(7)) is amended by adding at the end the following:

[[Page S5629]]

       ``(D) Additional employees.--As soon as practicable after 
     the date of enactment of this subparagraph, the Commission 
     shall appoint at least 100 full-time employees (in addition 
     to the employees employed by the Commission as of the date of 
     enactment of this subparagraph)--
       ``(i) to increase the public transparency of operations in 
     energy futures markets;
       ``(ii) to improve the enforcement of this Act in those 
     markets; and
       ``(iii) to carry out such other duties as are prescribed by 
     the Commission.''.

     SEC. 4. INSPECTOR GENERAL.

       Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)) 
     is amended by adding at the end the following:
       ``(13) Inspector general.--
       ``(A) Office.--There shall be in the Commission, as an 
     independent office, an Office of the Inspector General.
       ``(B) Appointment.--The Office shall be headed by an 
     Inspector General, appointed in accordance with the Inspector 
     General Act of 1978 (5 U.S.C. App.).
       ``(C) Compensation.--The Inspector General shall be 
     compensated at the rate provided for level IV of the 
     Executive Schedule under section 5315 of title 5, United 
     States Code.
       ``(D) Administration.--The Inspector General shall exert 
     independent control of the budget allocations, expenditures, 
     and staffing levels, personnel decisions and processes, 
     procurement, and other administrative and management 
     functions of the Office.''.

     SEC. 5. STUDY OF INTERNATIONAL REGULATION OF ENERGY COMMODITY 
                   MARKETS.

       (a) In General.--The Comptroller General of the United 
     States shall conduct a study of the international regime for 
     regulating the trading of energy commodity futures and 
     derivatives.
       (b) Analysis.--The study shall include an analysis of, at a 
     minimum--
       (1) key common features and differences among countries in 
     the regulation of energy commodity trading, including with 
     respect to market oversight and enforcement;
       (2) agreements and practices for sharing market and trading 
     data;
       (3) the use of position limits or thresholds to detect and 
     prevent price manipulation, excessive speculation, or other 
     unfair trading practices;
       (4) practices regarding the identification of commercial 
     and noncommercial trading and the extent of market 
     speculation; and
       (5) agreements and practices for facilitating international 
     cooperation on market oversight, compliance, and enforcement.
       (c) Report.--Not later than 120 days after the date of 
     enactment of this Act, the Comptroller General shall submit 
     to the appropriate committees of Congress a report that--
       (1) describes the results of the study; and
       (2) provides recommendations to improve openness, 
     transparency, and other necessary elements of a properly 
     functioning market in a manner that protects consumers in the 
     United States from the effects of excessive speculation and 
     energy price volatility.

     SEC. 6. SPECULATIVE LIMITS AND TRANSPARENCY FOR OFF-SHORE OIL 
                   TRADING.

       Section 4 of the Commodity Exchange Act (7 U.S.C. 6) is 
     amended by adding at the end the following:
       ``(e) Foreign Boards of Trade.--
       ``(1) In general.--In the case of any foreign board of 
     trade for which the Commission has granted or is considering 
     an application to grant a board of trade located outside of 
     the United States relief from the requirement of subsection 
     (a) to become a designated contract market, derivatives 
     transaction execution facility, or other registered entity, 
     with respect to an energy commodity that is physically 
     delivered in the United States, prior to continuing to or 
     initially granting the relief, the Commission shall determine 
     that the foreign board of trade--
       ``(A) applies comparable principles or requirements 
     regarding the daily publication of trading information and 
     position limits or accountability levels for speculators as 
     apply to a designated contract market, derivatives 
     transaction execution facility, or other registered entity 
     trading energy commodities physically delivered in the United 
     States; and
       ``(B) provides such information to the Commission regarding 
     the extent of speculative and nonspeculative trading in the 
     energy commodity that is comparable to the information the 
     Commission determines necessary to publish a Commitment of 
     Traders report for a designated contract market, derivatives 
     transaction execution facility, or other registered entity 
     trading energy commodities physically delivered in the United 
     States.
       ``(2) Existing foreign boards of trade.--During the period 
     beginning 1 year after the date of enactment of this 
     subsection and ending 18 months after the date of enactment 
     of this subsection, the Commission shall determine whether to 
     continue to grant relief in accordance with paragraph (1) to 
     any foreign board of trade for which the Commission granted 
     relief prior to the date of enactment of this subsection.''.

     SEC. 7. COMMISSION AUTHORITY OVER TRADERS.

       Section 4 of the Commodity Exchange Act (7 U.S.C. 6) (as 
     amended by section 6) is amended by adding at the end the 
     following:
       ``(f) Commission Authority Over Traders.--
       ``(1) In general.--Notwithstanding any other provision of 
     this section or any determination made by the Commission to 
     grant relief from the requirements of subsection (a) to 
     become a designated contract market, derivatives transaction 
     execution facility, or other registered entity, in the case 
     of a person located within the United States, or otherwise 
     subject to the jurisdiction of the Commission, trading on a 
     foreign board of trade, exchange, or market located outside 
     the United States (including the territories and or 
     possessions of the United States), the Commission shall have 
     authority under this Act--
       ``(A) to apply and enforce section 9, including provisions 
     relating to manipulation or attempted manipulation, the 
     making of false statements, and willful violations of this 
     Act;
       ``(B) to require or direct the person to limit, reduce, or 
     liquidate any position to prevent or reduce the threat of 
     price manipulation, excessive speculation, price distortion, 
     or disruption of delivery or the cash settlement process; and
       ``(C) to apply such recordkeeping requirements as the 
     Commission determines are necessary.
       ``(2) Consultation.--Prior to the issuance of any order 
     under paragraph (1) to reduce a position on a foreign board 
     of trade, exchange, or market located outside the United 
     States (including the territories and possessions of the 
     United States), the Commission shall consult with the foreign 
     board of trade, exchange, or market and the appropriate 
     regulatory authority.
       ``(3) Administration.--Nothing in this subsection limits 
     any of the otherwise applicable authorities of the 
     Commission.''.

     SEC. 8. INDEX TRADERS AND SWAP DEALERS.

       Section 4 of the Commodity Exchange Act (7 U.S.C. 6) (as 
     amended by section 7) is amended by adding at the end the 
     following:
       ``(g) Index Traders and Swap Dealers.--Not later than 60 
     days after the date of enactment of this subsection, the 
     Commission shall--
       ``(1) routinely require detailed reporting from index 
     traders and swap dealers in markets under the jurisdiction of 
     the Commission;
       ``(2) reclassify the types of traders for regulatory and 
     reporting purposes to distinguish between index traders and 
     swaps dealers; and
       ``(3) review the trading practices for index traders in 
     markets under the jurisdiction of the Commission--
       ``(A) to ensure that index trading is not adversely 
     impacting the price discovery process; and
       ``(B) to determine whether different practices or 
     regulations should be implemented.''.

     SEC. 9. DISAGGREGATION OF INDEX FUNDS AND OTHER DATA IN 
                   ENERGY MARKETS.

       Section 4 of the Commodity Exchange Act (7 U.S.C. 6) (as 
     amended by section 8) is amended by adding at the end the 
     following:
       ``(h) Disaggregation of Index Funds and Data in Energy 
     Markets.--The Commission shall disaggregate and make public 
     monthly--
       ``(1) the number of positions and total value of index 
     funds and other passive, long-only positions in energy 
     markets; and
       ``(2) data on speculative positions relative to bona fide 
     physical hedgers in those markets.''.
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