...fresh from Foley's scandal...now they chime in about regulating the financial markets due to Amaranth...
Historically, the buying and selling of natural gas takes place on the highly regulated New York Mercantile Exchange.
But in 2000, several major energy companies including Enron Corp. pushed for and won the passage of the Commodity Futures Modernization Act, which allowed certain commodities to be traded on unregulated electronic markets.
Favored by investment banks, hedge funds and other market speculators, these so-called over-the-counter trades were exempt from oversight by federal regulators such as the Commodity Futures Trading Commission (CFTC). Some energy analysts also see the trades as a reason for some of the wild price swings of natural gas in recent years.
U.S. Sen. Carl Levin, D-Mich., wants to stop the practice and introduce regulation to the over-the-counter trades.
Levin, cosponsor of the Oil and Gas Traders Oversight Act (SB 2642), wants to require that U.S. energy traders keep records and report large transactions to the CFTC.
"The bill will require that the large trades must now be disclosed to the regulator, whether the trade occurs on the NYMEX or electronically," Levin said. "With this bill, we'll have a cop on the beat in a free market that can prevent excessive speculation.