A federal bill that would limit wild fluctuations in the trading price of natural gas is winning support from one Utah manufacturer.

The legislation, HR1638, introduced to the U.S. House of Representatives this week, would limit daily trading prices of natural gas to an 8 percent increase or decrease.

In addition, the legislation would require the U.S. Commodity Futures Trading Commission to review and approve future natural gas contracts. The commission was created in the 1970s to regulate the trading of commodity futures contracts.

The bill, sponsored by U.S. Rep. Sam Graves, R-Mo., and Rep. John Barrow, D-Ga., is backed by Salt Lake-based Huntsman Corp., which relies on large amounts of natural gas to make its chemical products.

Don Olsen, a spokesman for Huntsman, said the company worked closely with Graves on the bill.

"This commodity that they're messing with is arguably the most important commodity to the U.S. economy," Olsen said. "Their trading rules are designed to promote volatility. In fact, the fundamentals of supply and demand are being ignored.

"Last winter we had record amounts of natural gas in storage. As of today we have the second highest amount of natural gas in storage in history.

And still, the United States has the highest and most volatile gas prices in the world."

Jason Klindt, a spokesman for Graves, said natural gas prices, unlike pork bellies, corn or other commodities, are not subject to trading limits.

"The extreme volatility of natural gas prices is having an absolutely damaging effect on manufacturers, seniors, consumers and farmers," said Klindt, who added that the bill "brings common sense and stability to the natural gas markets."

David Gary, deputy director of external affairs for CFTC, said he had no comment on the bill, but noted that in recent years more than $300 million in penalties had been paid by firms and individual traders who engaged in false price reporting of natural gas.

Despite those measures, companies like Huntsman Corp. have said they had to move operations overseas because of high energy costs. About 60 percent of Huntsman Corp.'s operations are now located in Europe and Asia, due in large part to antagonistic U.S. policies toward industry, according to Jon M. Huntsman Sr.

Huntsman has argued that America has dramatically shifted in the last quarter of a century to a non-industrial power, which, he said, "will come back to haunt us."

On April 8, working gas in underground storage for the lower 48 states was at 1,293 billion cubic feet, more than 19 percent higher than reserves a year ago and up 26.3 percent from the five-year average, according to the U.S. Energy Information Administration.

But in past years the price of natural gas has spiked as high as $11 per million British thermal units, compared to the 1990s, when the average price of gas hovered around $2 per million BTUs, according to Chris Bertelli, an energy consultant. Natural gas accounts for almost a quarter of U.S. energy consumption.

The new legislation would enact increased criminal and civil penalties for the manipulation or attempted manipulation of natural gas of up to $1 million for each violation.

---

E-mail: danderton@desnews.com