As the U.S. House Agriculture Committee considers ways to fight high oil prices, Rep. Jim Matheson on Wednesday asked the committee members to support a middle-ground bill he introduced to close loopholes that he says allow speculators to unfairly manipulate prices.

"What we really need is a level playing field that is transparent and accountable" in futures markets, Matheson testified to the committee. His comments came in the first of three scheduled days of hearings on possible changes to regulation of energy commodities.

Matheson, D-Utah, noted that some people want to do nothing to the current energy-futures market system, while other propose severe restrictions or bans on price speculation. He proposes a middle ground to close some loopholes that allow speculators to make an end-run around U.S. regulation by using foreign exchanges.

He noted that speculators who want to buy more energy commodities than U.S. exchanges allow now can go to British or other foreign exchanges and buy as many futures as they desire.

Matheson said that practice potentially leads to "massive, price-affecting holdings that would go undetected by U.S. regulators" as they try to stop unwarranted price increases.

"This doesn't make sense," he said. "Everyone who wants to trade in U.S. energy futures, especially in West Texas crude oil or natural gas, should be subject to the same rules."

He said his proposed "Close the London Loophole Act" would give the Commodity Futures Trading Commission authority to detect, prevent and punish price manipulators and speculators who trade U.S. crude oil on foreign exchanges.

Matheson said giving that authority to the commission is a reasonable step. But he urged caution against more stringent restrictions. "If legislation goes too far, it could drive a significant amount of business that is taking place in the U.S. today offshore," he said.

House Agriculture Committee Chairman Collin C. Peterson, D-Minn., said, "While many factors are putting pressure on the price of oil, a growing number of people are coming to the conclusion that a flood of speculative money into the energy future is behind the crude oil record-high prices."

He said that is why his committee is looking into ways to possibly better control energy commodities, including looking at Matheson's bill.

The committee's ranking Republican, Bill Goodlatte, R-Va., complained that Democrats are not focusing enough on other potential ways to lower oil prices, including allowing additional drilling in Alaska and the Rockies, and making it easier to develop oil shale or build new refineries.

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