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FERC Staff Seeks Subpoenas of Former BP Employee, ETP in Alleged Price Manipulation Case

FERC staff is seeking a pair of subpoenas to gather testimony in its six-year old case over allegations that BP America Inc. manipulated Houston Ship Channel (HSC) natural gas prices.

In documents filed with the Presiding Administrative Law Judge (ALJ) Tuesday, Federal Energy Regulatory Commission enforcement staff asked for a subpoena requiring testimony from Michael Berry, a former BP employee who "had compliance responsibilities at BP before, during and after the investigative period, and was the head of BP's IST Compliance (North America) starting in November 2008." Berry, who is considered a "nonparticipant" in the case, would be deposed at FERC headquarters in Washington, DC, on Aug. 21, according to the proposed subpoena. Berry currently works for PetroChina International (America) Inc. in Houston.

Enforcement Staff also requested the ALJ issue a subpoena for deposition testimony from Energy Transfer Partners LP (ETP) related to "ETP's transactions and transportation services in relation to HSC from September through November 2008." ETP, which is a non-party to the case, would be deposed on Aug. 19, according to the proposed subpoena.

The subpoenas come six weeks after a hearing before an ALJ on whether to limit the Office of Enforcement's (OE) request for five years of price data from IntercontinentalExchange Inc. and McGraw-Hill's Platts gas publications (see Shale Daily, June 16). Commission staff also issued a subpoena for transportation records from ETP for the September-October 2008 time period. At the same time, BP America and its affiliates filed an appeal to FERC for rehearing of the May 15, 2014 order setting the case for hearing, claiming the Commission had acted outside its jurisdiction, and attacking "enforcement's staff's flawed theory of manipulation." BP also attacked FERC for "failing to provide meaningful notice of allegedly impermissible behavior."

The hearing stemmed from a show cause order issued by FERC last August based on an OE investigation alleging that traders on the "Texas team" of BP's southeast gas trading desk traded physical natural gas at HSC in a manner designed to increase the value of the company's futures market position (see Daily GPI, Aug. 6, 2013).

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