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UK Parliament Announces Tighter Planning Guidance for Onshore Oil and Gas Applications

Posted in Europe, Natural Gas, Oil

In the first blog of this two-part series, we considered the potential impact of the 14th Round on the commercialisation of the shale gas in the UK in light of recent developments in this industry.

This second blog post focusses on the additional planning guidance for licence applications in National Parks, Areas of Outstanding Natural Beauty and World Heritage Sites, which was simultaneously released with the announcement of the 14th Round on 28 July 2014.

As we noted in part one, the 14th Round is the first opportunity for bidders to obtain onshore PEDLs following the release of a study that estimated the UK has a potentially vast amount of shale reserves. The 14th Round is also the first licensing round to follow protests in 2013 by members of the public at Cuadrilla’s site in Balcombe in West Sussex, after which Cuadrilla did not pursue fracking activities at the site. Shortly after these events, the UK Government published a new Environmental Report for public consultation, which assessed the likely significant effects of the draft Licensing Plan for the 14th Round.

Responses to the consultation showed that there was “strong support for the exclusion from licensing of environmentally sensitive sites”. The announcement of tighter planning guidelines acknowledged these such concerns and expressed the need to “create the right framework to accelerate unconventional oil and gas development in a sustainable way”.

On 28 July 2014, Lord Ahmad of Wimbledon, a Tory communities minister, clarified the Government’s approach to the exploration of unconventional hydrocarbons, stating that: “there are areas of outstanding landscape and scenic beauty where the environmental and heritage qualities need to be carefully balanced against the benefits of oil and gas from unconventional hydrocarbons.”

The planning guidance attempts to strike this “careful balance” by requiring mineral planning authorities to give “great weight” to “conserving [the] landscape and scenic beauty” of National Parks, the Broads and Areas of Outstanding Natural Beauty when considering applications for unconventional hydrocarbon development in such areas. Further, where applications represent “major development” in such areas, planning permission should be refused, “except in exceptional circumstances and where it can be demonstrated they are in the public interest”.[1]  In relation to World Heritage Sites, mineral planning authorities should “refuse consent unless wholly exceptional circumstances apply”.[2]

In addition, licence applicants will be required to submit a Statement of Environmental Awareness to demonstrate their understanding of environmental sensitivities relevant to the area proposed for licence.[3]

The planning guidance does not exclude the possibility of licensing fracking activities in even the most significant of the UK’s environmentally sensitive areas, should such activities be considered capable of deriving an exceptional benefit. Proponents of the shale gas industry in the UK, and its potential economic and energy security-related benefits for the nation, would view this as a pragmatic approach to balancing the possibility of exploiting highly lucrative hydrocarbon reserves against preserving the UK’s landscape.

Perhaps unsurprisingly, the announcement has not silenced all of the critics of fracking activities in the UK. Greenpeace UK reiterated its opposition to fracking in light of the 28 July 2014 announcement. In March 2014, the National Trust publicly advocated a complete ban on fracking in National Parks. In a 28 July 2014 press release, the National Trust welcomed the Government’s new planning proposals, but also suggested that the scope of the planning guidance should extend further still, to cover “nature reserves and other wildlife sites like Sites of Special Scientific Interest (SSSIs) as well”.

The 14th Round expands the possibility for increased commercial exploitation of shale gas in the UK, while also attempting to balance new exploration activities with concerns to safeguard the UK’s most significant environmental sites. These developments are likely to be of interest to energy companies considering investment in unconventional gas in the UK; this appears to be the hope of the UK Government, which is taking steps to actively encourage the future development of the UK’s shale gas industry. However, it remains to be seen whether the latest licensing round will be a “game changer” for the shale gas industry in the UK or public attitudes towards the impact of fracking activities on the UK’s countryside.

[1] The assessment that needs to be carried out is set out in paragraph 116 of the National Planning Policy Framework.

[2] The test to be considered by mineral planning authorities is set out in paragraph 133 of the National Planning Policy Framework.

[3] Statement by Baroness Verma on the outcome of the strategic environmental assessment (SEA) which has been conducted for further onshore licensing. [https://www.gov.uk/government/speeches/outcome-of-the-strategic-environmental-assessment]

UK Parliament Announces the 14th Landward Licensing Round

Posted in Europe, Natural Gas, Oil

In the first of a two part series on recent developments in the UK shale gas industry, this blog post considers the potential impact of the announcement on 28 July 2014 by the Business and Energy Minister, Matthew Hancock, inviting applications for Licences in the 14th Landward Licensing Round (the 14th Round) on the exploitation of shale gas in the UK, in the context of key recent developments in this fledgling industry.

The licensing system for the exploitation of the UK’s onshore and offshore oil and gas reserves is administered by Department for Energy and Climate Change (DECC). The award of a Petroleum Exploration Development Licences (PEDL) by DECC grants the licensee exclusivity in respect of oil or gas exploration or production within the licence area.[1]

The 13th onshore licensing round (the 13th Round) was the latest onshore licensing round in the UK, occurring in 2008. In the 13th Round, onshore PEDLs were awarded by DECC for the exploration of unconventional hydrocarbons, including shale gas, for the first time. After planning permission was granted, consent was given to drill for shale gas in five locations, two of which were held by Cuadrilla, an independent UK exploration and production company. To date, the UK shale gas industry remains in the exploratory phase, which is the earliest phase of development.

During this initial stage, the shale gas industry in the UK has experienced notable setbacks. The UK Government announced a moratorium on fracking in the UK following seismic tremors (with magnitudes of 2.3 and 1.5) arising from fracking activities at Preese Hall in Lancashire in April and May 2011. Preparations for the 14th Round originally began in December 2010, but were suspended after the events at Preese Hall.

In December 2012, the Energy and Climate Change Secretary of State announced that new regulatory requirements were being introduced to reduce the potential seismic risks associated with fracking activities in the UK and that fracking could resume in the UK. With this announcement, preparations for the 14th Round also resumed.

Further positive news for the industry followed in June 2013, when a report published by the British Geological Survey (BGS) in association with DECC estimated that there is 1,300 trillion cubic feet (tcf) (central estimate) of shale resources deposits in the Carboniferous Bowland-Hodder Shale area, which stretches from Blackpool and Wrexham in the North West of England to Scarborough in the North East of England. The potential significance of these estimated reserves for the UK’s future energy needs is put into perspective when compared to the annual consumption in the UK of just over 3 tcf.

In June 2014, the BGS announced that it had completed an estimate for the amount of shale gas and oil in the Midland Valley of Scotland. The shale gas in place is estimated at 80.3 tcf (central estimate), and the shale oil in place is estimated at 6.0 bbl (central estimate). The UK Onshore Operators Group (UKOOG), the representative body for the UK onshore oil and gas industry, welcomed the BGS’s estimates as a “reassurance to investors who wish to explore for oil and gas onshore in Scotland”.

However, the commercial viability of extracting some or all of the country’s potential shale resources must also be considered. A 2013 report by the US Energy Information Energy has estimated that technically recoverable shale oil and shale gas resources in the UK could amount to up to 26 tcf. Various studies have been undertaken on the potential impact of the commercialisation of shale gas for the UK, but so far have not produced concrete conclusions on the outlook for shale gas in the UK. For instance, an Energy and Climate Change Select Committee (ECCC) inquiry in 2011 concluded that although shale gas resources in the UK could be considerable — particularly offshore — shale gas was unlikely to be a “game-changer” as in the US. A follow-up ECCC inquiry in 2013 on the impact of shale gas on energy markets concluded that it was “too early to say whether domestic production of shale gas could result in cheaper gas prices in the UK” and that “[…] it remains uncertain whether industry will consider shale oil economically worthwhile to explore”.

DECC’s plans to create an attractive and effective framework for the exploration of shale gas are intended to encourage the development of the shale gas industry in the UK. In addition to inviting bidders to apply for PEDLs in the 14th Round, the UK Government has recently introduced measures to make the tax environment more appealing to investors in unconventional hydrocarbons. The development of the shale gas industry will, in turn, help to more accurately ascertain the amount of estimated reserves that can be viably extracted and exploited from the UK’s underground shale deposits, as the most accurate estimates can be obtained from test drilling.[2]

The announcement of the 14th Round represents a step forward in this development plan, creating the first opportunity for applications for new onshore PEDLs since the BGS published its estimates of the UK’s shale gas reserves. The competition for licences is likely to attract significant interest from energy companies seeking to explore the UK’s potentially vast shale reserves. Of particular interest are likely to be the Bowland basin of the north-west, a central belt of Scotland and the Weald in the south-east.

The identity of the bidders for PEDLs in the 14th Round will be noted with interest. In June 2013, Centrica acquired a 25% stake in Cuadrilla’s interest in the Lancashire Bowland shale gas exploration licence area. The introduction of larger players, such as Centrica, investing in UK shale gas after the 13th Round indicates an increased confidence in the industry. However, it would be premature to conclude that this acquisition marks the beginning of a trend of activity in UK shale gas by larger energy companies. At present, the industry remains dominated by independent energy companies, notably Cuadrilla.

[1] In addition to the award of a PEDL, there are various other statutory and legal requirements in order for exploration or production activities to be commenced within the licence area. The licensee must also obtain: access rights from landowners; planning permission under the statutory planning regime (which may also involve undertaking an Environmental Impact Assessment); permits from the Environment Agency; and approval from the Health and Safety Executive. Further activities such as the drilling of wells, installation of facilities or production of hydrocarbons require additional authorisation by the Secretary of State for Energy and Climate Change.

[2] Parliamentary Note SN/SC/6073, 5 June 2014.

CFTC Commissioner O’Malia Resigns from the CFTC to join ISDA

Posted in CFTC

On Monday, July 21, CFTC Commissioner Scott D. O’Malia announced his resignation from the Commission as of August 8, 2014.  On July 23, the International Swaps and Derivatives Association (ISDA) announced that Mr. O’Malia was appointed chief executive officer and a director of ISDA.  See Scott O’Malia Appointed Chief Executive Officer of International Swaps and Derivatives Association.  Commissioner O’Malia was considered a strong advocate for end-user issues, specifically those impacting energy companies.  Therefore, energy companies should be sure to meet with the new Commissioners to discuss the impact of the new CFTC regulations on their businesses.

Commissioner O’Malia’s departure will, once again, leave vacant a Republican seat on the Commission.  Once Commissioner O’Malia departs, the sole Republican Commissioner will be Christopher Giancarlo, who was recently sworn in on June 16.  Commissioner O’Malia began his service on October 16, 2009, prior to the passage of the Dodd-Frank Act, and is currently the most senior Commissioner at the CFTC.  Upon his departure, Commissioner Mark Wetjen will be the longest serving Commissioner; his term began on October 25, 2011.

Commissioner O’Malia reconstituted the CFTC’s Technology Advisory Committee and served as its chairman.  The Committee was very active during O’Malia’s tenure and took a leading role in examining market issues such as the “flash crash,” and “high frequency trading,” as well as highlighting the importance of investments in technology by the CFTC.  It is as yet unknown who will be the next chairman of the Committee, but it is of particular importance as international regulatory scrutiny surrounding “high frequency trading” continues.

During his term, Commissioner O’Malia was an advocate for the impact of the CFTC’s Dodd-Frank regulations on end-users, including energy companies, and their ability to hedge commercial risk.  Earlier this month Commissioner O’Malia continued to express concerns for the increased costs of the CFTC regulatory reforms:

. . . CFTC regulations are negatively impacting liquidity for end-users and making hedging too costly.  These increased costs will ultimately trickle down to consumers through higher prices for commodities . . . The legitimate hedging and risk mitigation activities of commercial businesses like end-users were not supposed to be impacted by the OTC derivatives reforms in Dodd-Frank because they did not contribute to the financial crisis.

See Keynote Address by Commissioner Scott D. O’Malia at the Federal Reserve Bank of New York.  Commissioner O’Malia also voiced support in his speech for the CFTC reauthorization bill recently passed by the U.S. House of Representatives that provided, among other things, relief to end-users.  The bill would excluded end-users from the “financial entity” definition, which would potentially relieve entities such as energy companies from registration as a “swap dealer.”  CFTC reauthorization and the House bill still need to be considered by the U.S. Senate before any changes to the end-user provisions become law.  The specifics and timing of the ultimate outcome of the CFTC reauthorization remain unclear.

Mr. O’Malia’s statement in the press release announcing his CEO appointment notes the importance of hedging commercial risks through the use of derivatives: “The need by thousands of companies around the world to manage and hedge their business and financial risks via derivatives remains as important as ever.  ISDA’s role is to ensure derivatives markets help to fulfill this promise.”  According to ISDA, 42% of its members are end-users of derivatives and 8% are energy and commodity firms.  See ISDA: The Value of Derivatives. Therefore, it would appear that end-user issues will have a place on Mr. O’Malia’s agenda at ISDA.

The recent changes at the Commission continue to be of importance to energy companies.  The energy industry and market participants should follow developments at the CFTC, particularly as the agenda under new Chairman Timothy Massad takes shape over the next months.

Commerce Department Rulings Spur Oil Export Battle

Posted in Oil

As reported in our blog post of last week, the Commerce Department Bureau of Industry and Security (“BIS”) recently determined in two private classifications that lease condensate — a type of stabilized and distilled light crude oil — is not subject to the United States’ broad ban on crude oil exports.  BIS has for years defined “crude oil” in its regulations as “a mixture of hydrocarbons that existed in liquid phase in underground reservoirs and remains liquid at atmospheric pressure after passing through surface separating facilities and which has not been processed through a crude oil distillation tower.”   Although the regulations state that this definition includes lease condensate, BIS appears to have determined that lease condensate that has been distilled is a refined petroleum product that is not subject to the broad ban on crude oil exports from the United States.

While BIS claims that there has been “no change in policy on crude oil exports,” the recent determinations have spurred the debate over whether the U.S. should change its position on crude oil exports.  In particular, Senators Robert Menendez (D-NJ) and Edward Markey (D-Mass.) — who have been vocal opponents of lifting the ban on crude oil exports — wrote a letter to Commerce Secretary Priztker alleging that BIS may have impermissibly approved the exports of lease condensate and demanding copies of the two determinations and information on the legal rationale for approving such exports by July 14, 2014.  Senators Markey and Menendez argue that allowing exports of crude oil would increase reliance on foreign oil and cause domestic gas prices to rise.  However, with U.S. crude oil production surging as a result of the advancements in hydrofracking technology, Senators Lisa Murkowski and Mary Landrieu have championed the effort to reconsider the ban on crude oil exports, which has been in place since the Arab oil embargo and global energy supply shortages of the 1970s.  In particular, Senator Murkowski has issued a report calling for a “renovation” of U.S. energy export policy, which includes an April 2014 white paper in advocating for condensate exports.

While some view BIS’ approval of condensate exports as a step towards a greater liberalization in crude oil export policy, financial analysts such as Morgan Stanley are not bullish on any significant changes occurring before this years’ mid-term elections.  Moreover, recent reports indicate that the White House may not have been aware that BIS was planning to issue such determinations, and therefore this may not represent a conscious effort on the part of the Obama Administration to change crude oil export policy.  Indeed, Secretary Pritzker has confirmed publicly that the rulings were not a change in policy.  However, the Secretary also said that “it’s a mistake to think there isn’t serious conversation going on within the administration about what we should do,” and that the issue of energy exports overall should be “examined holistically from an economic, strategic, and diplomatic standpoint.”  These statements suggest that the Administration is not backing down from the condensate rulings, and is considering the broader policy issues involved in allowing exports of other oil products.

DOE Finalizes $4 Billion Clean Energy Technology Loan Guarantee Program

Posted in Biofuels, Government Contracts

On July 3, 2014, the U.S. Department of Energy (“DOE”) issued a final solicitation for the Renewable Energy and Energy Efficient Projects Loan Guarantee Program.  As we previously reported with respect to the draft solicitation issued on April 16, 2014, the Program is expected to make up to $4 billion in loan guarantees available for projects located in the United States that use innovative renewable or energy-efficient technologies that avoid, reduce, or sequester greenhouse gases.  The Program offers yet another opportunity to obtain financial assistance from DOE for innovative clean energy technology projects, as part of the Administration’s “all-of-the-above” energy strategy.

The final solicitation continues to identify five key areas of interest to DOE, including advanced grid integration and storage, drop-in biofuels, waste-to-energy, enhancement of existing facilities, and efficiency improvements.  Although a number of comments on the draft solicitation took issue with DOE’s intent to support waste-to-energy technology, as well as drop-in biofuels, which are chemically indistinguishable from petroleum-derived fuels and may be used in existing infrastructure, DOE highlighted in response that the statute authorizing the Program—the Energy Policy Act of 2005—defines both combustion and non-combustion technologies as eligible to receive loan guarantees.

DOE reiterated that projects will be evaluated on a case-by-case basis.  It further explained that the technologies identified in the final solicitation are for illustration purposes only; projects using an identified technology will not automatically be eligible to participate in the Program.  DOE will conduct a life-cycle assessment to determine the extent to which a proposed project avoids, reduces, or sequesters greenhouse gases.  DOE intends to issue guidance on the nature of the life-cycle assessment to ensure transparency in the evaluation process.

Although any project that meets the final solicitation’s requirements is eligible participate in the Program, DOE will look favorably on projects that have a catalytic effect on the commercial development of innovative technologies.  DOE will also look favorably on projects that make use of other sources of financing.

The final solicitation provides for five rounds of evaluation.  In each round of evaluation, DOE will subject an application to a complete review only after making a preliminary determination that a proposed project meets the Program’s requirements.  Initial applications for the first round of evaluations are due on October 1, 2014, with complete applications due on January 14, 2015.  Initial applications for the fifth round of evaluations are due on December 2, 2015, with complete applications due on March 2, 2016.  Applications must be submitted via a web-based portal, which has yet to be established.

Commerce Department Clarifies Requirements for Exporting Condensate Oil

Posted in Oil

In a determination rendered last week, the Commerce Department provided guidance to two companies on the application of export controls to processed  condensate  that could mark a potential thaw in the long-standing ban on exports of crude oil. Condensate is an ultra-light oil that has seen increasing domestic development alongside the recent boom in shale oil production.  However, there is little domestic demand for the product, and the United States has substantially restricted the export of domestic crude oil since the 1970s.

Early reports on the decision, which was limited to the two companies and was not made public, suggested that the Department had partially lifted the ban on crude oil exports.  But as more details emerged, it became apparent that the Department had not officially altered these rules. Instead, its decision was based on a more expansive interpretation of what constitutes a “refined” petroleum product.  Unlike crude oil, refined petroleum products (such as a gasoline or diesel) are eligible for export with minimal restrictions.  The Department reportedly concluded that processing condensate through a stabilizer could suffice in certain circumstances to convert condensate into a refined product.  Since this is a relatively unobtrusive procedure, the decision should make it easier to convert unprocessed condensate into a product eligible for export.

As noted, the decision—which reportedly took the form of a classification determination under the export control regulations—is not public and limited to the two particular energy companies.  As a result, it is unclear how far it extends or the degree to which it marks a material change in oil export policy.  While Commerce Department officials denied that there had been any alteration to the ban on crude oil exports, the Department also indicated it was working on industry-wide guidelines that might further clarify any new opportunities that may exist for exporting oil products.  Pending such guidelines, a wave of similar classification requests involving processed condensate is likely. Two Senators have written to Commerce Secretary Pritzker questioning the decision.

Covington SEO Intern Kendra Mells provided integral research assistance on this blog post.

FERC Exploring RTO/ISO Market Pricing And Operational Practices

Posted in Electricity, FERC

At its recent public meeting, FERC opened a staff-led proceeding to address price formation and related issues in the RTO/ISO wholesale electricity energy markets.  Concerns with whether these organized markets are attracting appropriate levels and types of new generation capacity and the markets’ performance during last winter’s Polar Vortex have raised questions regarding their designs and operational practices.

The RTOs and ISOs run hourly energy auction markets to call forth, through price signals, the generators that will run, and the demand that is willing to be cut, to keep the grid in balance.  The operators also ensure that sufficient resources are committed over some future periods; some accomplish this through capacity auction markets.  There have been concerns recently that the capacity markets are attracting mostly low-cost gas generators and not taking into account the need for fuel diversity and for generators that can serve as workhorse “base load” resources.  During a FERC conference on the capacity markets, it was suggested that pricing rules in the energy markets also play a role in attracting investment and should be examined.  Subsequently, comments during FERC’s conference on market performance during the Polar Vortex suggested that energy market pricing rules and operational practices may have interfered with the markets’ response to the extreme conditions.

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A Quick Look at the Gazprom/Naftogaz Contract Dispute

Posted in Europe, Natural Gas

On Monday, June 16, 2014, Gazprom and Naftogaz each announced that they were commencing arbitration proceedings under the SCC Rules (seated in Stockholm, Sweden).

The arbitration arises under Contract No. KP dated January 19, 2009 (the “Contract”), a 10 year, long-term gas sales agreement between Gazprom and Naftogaz for volumes ranging from 40 to 52 billion cubic meters of gas per year. On the basis of the statements released by the parties, it appears that Gazprom will be alleging a debt claim. Naftogaz appears likely to invoke the price review provisions and seek a decrease in price. The value in dispute is in excess of US$4.5 billion.

To resolve the dispute, the tribunal will likely need to consider the price review provisions in the Contract. Pricing terms and price review provisions are confidential and rarely disclosed. However, Ukrainskaya Pravda — a Ukrainian news outlet — purported to publish the terms of the Contract when it was agreed. Assuming that the Contract published by Ukrainskaya Pravda contains the price review provisions that are relevant to the current arbitration between Naftogaz and Gazprom, the tribunal will be required to interpret some unusual terms.

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Pricing Complexity and Predictable Disputes – A primer on modern long-term gas supply contracts

Posted in Europe, Natural Gas

On Monday, June 16, 2014, Gazprom announced that it commenced arbitration proceedings against Naftogaz under the SCC Rules (seated in Stockholm, Sweden) alleging that Naftogaz has failed to pay US$4.5 billion for gas that Gazprom has already delivered to Naftogaz. Naftogaz also announced that it had commenced a claim under the SCC Rules, seeking the establishment of a fair price for gas and alleging that it has overpaid for the gas already supplied. Some reports suggest that another claim – valued at over US$18 billion – is just around the corner.

When disputes of this value arise, it is important to understand the issues underlying the dispute and how these disputes can be avoided or mitigated. We set out below some thoughts on the structure of pricing provisions in modern long-term gas supply agreements generally.

Complex pricing provisions are a common feature of long-term commodity contracts. In long-term gas sales agreements, a fixed price for the term of the agreement is usually unrealistic due to shifts in the competitiveness of the price over time. There is no single pricing term or indices that parties can universally reference. For this reason, parties typically agree on a bespoke price formula that includes a number of variables. The variables in the formula are agreed between the parties during the negotiation of the contract. Variables can represent substitute energy sources, hub prices, coefficients to counteract the impact of inflation or mitigate currency exchange risks or any other factor that the parties consider might impact the value of gas sold under the agreement.

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Senate Confirms New CFTC Commissioners

Posted in CFTC

On Tuesday, June 3, the Senate approved the nominations of Timothy Massad to be Chairman of the CFTC and Christopher Giancarlo and Sharon Bowen to be Commissioners of the CFTC.  Messrs. Massad’s and Giancarlo’s nominations were approved by voice vote.  Ms. Bowen’s nomination, however, was more controversial as demonstrated by its approval by a recorded vote of 48-46.  Senators David Vitter (R-LA) and Thad Cochran (R-MS) made public their reservations about Bowen’s nomination, which they attributed to her role as Chair of the Securities Investor Protection Corp. (“SIPC”) when the decision was made that SIPC would not compensate victims of Allen Stanford’s Ponzi scheme.

Two days after approval of the nominations by the Senate, on June 5, Mr. Massad was sworn in as Chairman.  Ms. Bowen was sworn in on Monday, June 9, and Mr. Giancarlo’s swearing in is soon to come.

The current Commission is Chairman Timothy Massad, Commissioner Sharon Bowen, and Commissioner Mark Wetjen, who are Democrats, and Commissioner Scott O’Malia, who is a Republican.  Upon the swearing in of Christopher Giancarlo, the Commission will be filled for the first time since the departure of Commissioner Jill Sommers in July 2013, whose seat will be filled by Mr. Giancarlo.

Former Chairman Gary Gensler placed strong emphasis on the importance of an aggressive Division of Enforcement and routinely referenced the negative impacts of what he viewed as inadequate funding on enforcement efforts, even stating that Enforcement had to “shelve cases” due to resource constraints.  Interestingly, one of the first actions Chairman Massad took upon being sworn in was appointing Aitan Goelman as Director of Enforcement.  Mr. Goelman is a former federal prosecutor and partner of Zuckerman Spaeder LLP.

With a new Commission in place, over the coming days and months market participants will begin to see the priorities of the new Chairman.  He is expected to address two issues that have been the subject of much controversy – the position limits rule, which was proposed in December 2013, after the previously finalized rule was vacated by the District Court for D.C., and the CFTC’s cross-border guidance, which is the subject of a lawsuit filed in December 2013 by three large trade groups (Securities Industry and Financial Markets Association, International Swaps and Derivatives Association, Inc., and Institute of International Bankers).  In addition, it is expected that Mr. Massad will take steps to provide market participants certainty around regulation by making the multiple no-action letters issued by various CFTC Divisions into Commission rules.  Specifically, energy companies should follow developments related to the definition of swap, particularly volumetric options and trade options, as well as continued implementation of the End-User exception from clearing and trading.  Market participants should also be keen to observe the dynamic among the new Commission when they meet publicly.