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Issue link: https://read.dmtmag.com/i/131382
TOP OF THE NEWS Coalition urges court to re-impose limits on excessive commodity speculation T he Commodity Markets Oversight Coalition (CMOC), a broad coalition of associations representing Main Street businesses filed an amicus curiae brief with the U.S. Court of Appeals of the District of Columbia in support of a Commodity Futures Trading Commission's (CFTC) rule that would limit speculative trading in commodities. The 2010 Dodd-Frank Act required the CFTC to quickly adopt speculative position limits for all energy futures and swaps and report back to lawmakers on their impact after the limits had been imposed for one year. Accordingly, the CFTC approved a final rule on Oct. 18, 2011 that would have imposed speculative position limits on futures and swaps for 28 listed commodities. Last September, a District Court judge, responding to a legal challenge by Wall Street groups, vacated the rule citing an "ambiguous" congressional mandate and CFTC's failure to determine if it should have made a finding of necessity before promulgating the final rule. In its amicus brief, the CMOC supports the CFTC's position that Congress mandated a rule setting speculative position limits, citing nearly a decade of congressional investigations and dozens of hearings into the matter. During that time, lawmakers received expert testimony from CMOC members on the harm that excessive speculation was caus- n NATSO, other marketer groups protest pipeline decision to halt ULSD shipments NATSO and other associations representing petroleum marketers and retailers filed a protest with the Federal Energy Regulatory Commission (FERC) over Enterprise TEPPCO's recent decision to halt interstate ULSD on its pipeline effective July 1, 2013. NATSO, representing truckstops and travel plazas, along with the Petroleum Marketers Association of America (PMAA), the Arkansas Oil Marketers Association, Louisiana Oil Marketers and Convenience Store Association and Missouri Petroleum Marketers and Convenience Store Association joined several companies to file the protest on April 22, including CHS Inc.; HWRT Oil Co. LLC; GROWMARK LLC.; MFA Oil Co.; Southwest Airlines and United Airlines. 6 MAY/JUNE 2013 ing their industries and constituent businesses. "Congress had been gathering evidence for nearly a decade about excessive speculation and had already concluded that [excessive speculation] constituted an undue burden on interstate commerce," the coalition said in the brief. "Congress had studied and identified a serious crisis that it wanted remedied quickly and therefore, mandated position limits." The coalition also pointed to the requirement by Congress that regulators conduct an expedited rulemaking process. Lawmakers also required a study into the effect of position limits one year after they had been imposed. Given this, "there should be no doubt that Congress was mandating swift and decisive action to end what it believed was a serious problem," the CMOC said. The Commodity Markets Oversight Coalition is a nonpartisan alliance of organizations that represent commodity-dependent American industries, businesses, end-users and consumers. CMOC members rely on functional, transparent and competitive commodity derivatives markets as a hedging and price discovery tool. The coalition advocates in favor of policies that promote stability and confidence in the commodities markets; prevent fraud, manipulation and excessive speculation; and preserve the interests of bona fide hedgers and American consumers. The pipeline originates in Baytown, Texas, and runs through Louisiana, Arkansas, Missouri, Indiana, Illinois, Ohio, Pennsylvania and New York. Enterprise first notified customers in March that it would be terminating interstate shipments on its pipeline of ULSD and jet fuel, and on April 5, filed with FERC a tariff change purporting to cease accepting nominations of shipments of ULSD and jet fuel, except for deliveries of jet fuel to two locations on its system. The associations are concerned that once ULSD shipments end, the area served by the Enterprise TEPPCO pipeline could experience product shortages, especially in markets in Louisiana, Arkansas and Missouri, where alternative ULSD supply sources are unavailable. These shortages could raise diesel prices and compromise consistent availability of the product for consumers reliant on the fuel for transportation, agriculture or other commercial uses. The groups argued that while Enterprise TEPPCO intends to cancel ULSD and jet fuel interstate shipments on its pipeline, it has not abandoned service and it will continue to provide both interstate and intrastate ULSD and jet fuel transportation to certain shippers and destinations. These actions are arbitrary and discriminatory and will have serious consequences for shippers and consumers. The associations also expressed concerns about the availability of ULSD in emergencies, especially with the Arcadia, La., terminal being on the TEPPCO pipeline. This decision by Enterprise has the potential to cause major supply issues throughout the TEPPCO system under normal circumstances. But in an emergency, such as the hurricanes of recent years, the petroleum industry's ability NPN Magazine n www.npnweb.com