A number of Congressional lawmakers have expressed interest in resolving the issue of which federal agency — the Federal Energy Regulatory Commission or the Commodity Futures Trading Commission (CFTC) — has jurisdiction in cases involving the manipulation of the futures and physical gas markets, said a Commission spokeswoman.

“Anybody who has asked us questions [about this], FERC has responded,” she said, but would not elaborate on who the questions came from or what the response was. FERC Commissioner Tony Clark, a Republican and the newest member of the Commission, has said he would like to see Congress come up with a legislative fix to address cases involving “cross-market manipulation” of the physical and futures markets (see NGI, March 25).

The congressional concerns stem from a ruling by the U.S. Court of Appeals for the District of Columbia in early March that found that FERC lacked authority in the futures market and therefore could not penalize Brian Hunter, a former gas trader for failed hedge fund Amaranth Advisors LLC (see NGI, March 18). The court overturned a FERC order imposing a penalty of $30 million on Hunter.

In assessing the fine, FERC claimed that Hunter’s manipulation of the futures market, over which the CFTC traditionally has jurisdiction, subsequently impacted prices in the physical markets, over which FERC traditionally has jurisdiction.

“I don’t think there should be any holes” in the regulation of the physical gas market and the futures gas market, said outgoing FERC Chairman Jon Wellinghoff. He said a number of congressional committees “are looking at this” issue to determine who has jurisdiction when cross-manipulation of the two markets is involved.

The two federal regulatory agencies for years have butted heads over the issue of whether FERC has jurisdiction in cases where the manipulation of natural gas futures trades subsequently influences the price of physical gas transactions.

Sens. Ron Wyden, chairman of the Senate Energy and Natural Resources Committee; Lisa Murkowski, the ranking member on the Senate Energy Committee; and Sen. Dianne Feinstein (D-CA) sent a letter to the CFTC and FERC urging a quick resolution of jurisdictional disputes that have hampered more rigorous oversight of U.S. energy markets.