WASHINGTON The House of Representatives on Thursday overwhelmingly approved legislation that directs the Commodity Futures Trading Commission to use all its authority, including the agency's emergency powers, to "curb immediately" the role of excessive speculation in energy futures markets.
Hedge funds, pension funds and other speculators have been blamed by many lawmakers and some energy experts for doubling the price for crude oil in the last year. The Bush administration disagrees, saying high prices are the result of world oil production not being able to keep up with growing global fuel demand.
The bill easily cleared the House in a 402-to-19 vote. The Senate must still take up the measure.
The legislation, sponsored by Rep. Collin Peterson of Minnesota, the chairman of the House Agriculture Committee, would require the CFTC to act against "sudden or unreasonable fluctuations" in energy futures prices and other trading activities that "prevent the market from accurately reflecting the forces of supply and demand for energy commodities."
"It opens up a set of new tools they are not using," said Maryland Democratic Rep. Chris Van Hollen, referring to the agency's emergency powers.
"The American people should not be punished at the pump for the actions of oil speculators," said House Speaker Nancy Pelosi.
CFTC chairman Walter Lukken testified to Congress this week that speculators are needed in the futures markets and they are not to blame for record oil and gasoline prices.
Nonetheless, in response to high energy costs, the CFTC has ordered that more information on energy trading be reported to the agency and is investigating possible market manipulation of oil prices.
But Virginia Republican Bob Goodlatte said while he will support the bill, Congress needs to work harder to increase the supply of oil and natural gas by allowing more drilling offshore and elsewhere.
"I find it appalling we are not doing the job that needs to be done," he said on the house floor.
Added Republican Rep. Dan Burton of Indiana: "It's time we start drilling here in the United States. The minute we do that the price will drop,"
About a dozen bills are pending in the Congress to rein in energy speculators.
Earlier this week, Democratic Sen. Byron Dorgan of North Dakota introduced legislation that would increase the money, or margin, that speculators would have to put up to trade oil futures at the New York Mercantile Exchange NMX.N to 25 percent of the value of the underlying commodity. Currently, the margin on oil futures is about 7 percent.
(Additional reporting by Russell Blinch; Editing by Marguerita Choy)