The Commodity Futures Trading Commission (CFTC) may soon be an indirect supporter of efforts by Amaranth Advisors (Amaranth), Energy Transfer Partners (ETP), and trader Brian Hunter to derail the Federal Energy Regulatory Commission's (FERC) use of its expanded civil penalty authority to prosecute alleged attempts to manipulate natural gas futures prices.  Reports this week revealed that the CFTC intends to argue before a US District Court in New York that  FERC's penalty authority for energy market manipulation does not extend to the futures market.  If so, then the CFTC would be echoing the defenses of Amaranth, ETP and Brian Hunter in their respective challenges to FERC's jurisdiction over the weeks since FERC issued its show-cause orders for multi-million dollar penalties in each case.  

Some sources believe the CFTC is compelled to argue exclusive jurisdiction due to proprietary or “turf” motivations.  FERC has stressed that its action against Amaranth is based on the connection between the futures market and physical gas prices, and not on futures per se, over which CFTC reigns supreme.  Nevertheless, FERC Commissioner Marc Spitzer has said that the new statute and the new cases present a learning experience, but he does not believe Congress intended to preclude FERC from oversight of derivative transactions.  Influential lawmakers agree.  Senate Energy and Natural Resources Committee Chairman Senator Jeff Bingaman (D-NM) has endorsed shared energy market oversight, adding that Congress intended both CFTC and FERC to serve those roles.