ETP settles ship channel gas manipulation claims

We only mentioned this in passing in the print edition earlier this week, so it’s worth repeating via blog…
Energy Transfer Partners, the Dallas-based firm the CFTC and FERC accused of trying to manipulate natural gas prices through the Houston Ship Channel has settled the claims for $10 million.
Essentially Energy Transfer was accused of selling natural gas at the Houston Ship Channel hub at below-market prices while simultaneously buying gas at the hub and placing financial bets that the price would go down. The company would lose money on the sales but more than make up for it on the financial bets, known as short positions.
The charges were seen as part of a broader effort by CFTC and FERC to get tough with energy markets.
As the CFTC put it in their release:

“[CFTC] … obtained a $10 million civil monetary penalty in a consent order settling charges against Energy Transfer Partners, L.P., of Dallas, Texas, and three ETP subsidiaries: Energy Transfer Company, of San Antonio and Houston; Houston Pipeline Company, of Houston; and ETC Marketing, Ltd., located in San Antonio and Houston.”

And as ETP put it in their release on the matter:

“As a result of this agreement, the CFTC’s legal proceeding has been dismissed by the court. The agreement between the CFTC and ETP contains no findings of fact or conclusions of law.”

Funny how the CFTC doesn’t mention that last part.

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