June 27 (Reuters) - The U.S. House of Representatives on Thursday passed legislation, which still must be voted on in the Senate, ordering the Commodity Futures Trading Commission to use is emergency powers to curb excessive speculation in energy futures markets.
The CFTC said it has used its emergency powers in response to extreme events, such as manipulation or a specific disturbance that caused a sudden shock to the markets. But the agency said it has never exercised its emergency powers based on price trends that have developed over months or years, as has been the case with current record oil and gasoline prices.
Since the CFTC's creation by Congress in 1976, the agency has used its emergency authority four times.
* November 1976 Maine Potatoes Traded on New York Mercantile Exchange: This involved a threat of manipulation in an expiring contract. In November 1976, the commission declared an emergency and ordered the exchange to impose 100 percent margins on all accounts and to limit trading in this contract to liquidation only.
* December 1977 Coffee Traded on New York Coffee and Sugar Exchange: This involved a threat of manipulation in an expiring contract. In November 1977, the commission, in conjunction with the exchange, declared an emergency and ordered a phased liquidation of all positions subject to a prescribed schedule.
* March 1979 Wheat Traded on Chicago Board of Trade: This involved a threat of manipulation in an expiring contract. In early 1979, the commission declared a market emergency and ordered a one-day suspension of trading so the exchange could take further regulatory action. Subsequently, based on its belief that an emergency continued to exist, the CFTC ordered the exchange to suspend all further trading in the contract and to settle any contracts remaining after the delivery period expired at the last prevailing settlement price for that contract.
* January 1980 Soviet Grain Embargo: In January 1980, when President Jimmy Carter imposed the Soviet grain embargo after the Soviet Union invaded Afghanistan, the CFTC declared an emergency and suspended trading for two days in futures for wheat, corn, oats, soybeans, soybean meal and soybean oil that were traded on four different exchanges. The commission acted because, in its view, the sudden shock to the market and uncertainties concerning unannounced USDA plans to compensate those affected by the embargo would render the markets temporarily incapable of accurately reflecting the forces of supply and demand. The two-day suspension gave the markets time to consider the USDA support programs in light of the embargo action.
The CFTC said its emergency authority is subject to review by the U.S. Court of Appeals based on information the agency has at the time of the emergency action. (Reporting by Tom Doggett)