Commodity Futures Trading Commission Chairman Gary Gensler said Dec. 2 that the nation’s futures trading platforms for energy remain vibrant and important to the economy, with 315 million energy futures and options contracts traded on regulated exchanges in the first ten months of the year.

In testimony before a panel of House Energy and Commerce members last week, Gensler said West Texas Intermediate, or WTI, was the largest crude futures contract traded during that period by volume. Some 114 million WTI contracts changed hands, the equivalent of 114 billion barrels of oil, with a notional value of $7 trillion, he said.

Gensler said the largest contract in natural gas was NYMEX’s Henry Hub natural gas contract, with 38 million contracts. That’s the equivalent of 380 billion BTU’s of natural gas with a notional value of $1.6 trillion. Energy futures markets also include very significant trading in electricity contracts, which, as a class, had more than 23.5 million contracts traded representing 7.5 percent of the overall volume in the energy sector.

In previous briefings we covered the fact that Renewable Identification Numbers are utilized to track renewable fuel through the supply chain, but ultimately RINs are used to demonstrate compliance. Companies identified by EPA as “obligated parties” must meet the mandated standards in order to remain compliant with the federal law.

The typical obligated party is a company that refines crude oil and produces finished gasoline. By far the biggest portion of obligated parties are refiners, such as ExxonMobil, ConocoPhillips, Valero, BP, Shell, and Chevron. Other companies that fall under the RFS obligated party classification would be importers of gasoline into the U.S. as well as companies that buy petroleum intermediate components and blend at facilities like fuel terminals to produce finished gasoline.

Under the regulations, each of these obligated parties is then bound by the law to use their pro-rata share of renewable fuel. Recalling that the RFS is really a percentage established each year (see Briefing #1 What is the Renewable Fuel Standard?), the company multiplies their on-road gasoline production (1) times the RFS to determine their obligation. This is called their RVO or renewable volume obligation.