Good morning. I would like to thank Commissioner Mersinger for the kind invitation to join this meeting of EEMAC – the inaugural meeting of this advisory committee under your leadership. I also want to extend my gratitude to the members of this committee. These are volunteer roles and I understand well that you have very demanding day jobs. Thank you for your service and your sacrifice. We value your input greatly. Thank you to Oklahoma State University (OSU) for hosting this important meeting.

I am sad to miss being there with you today but very excited that one of my fellow Commissioners had the great insight to host a meeting in a place where I have many friends and neighbors. From my family’s house in Dallas, you can hop on interstate 35 and if you drive north for a couple of hours, you’ll arrive in Stillwater, Oklahoma. I have had the good fortune to attend many a football game at OSU.

While I have attended many college football games, I have never played on a football team. As a Commissioner, however, I am learning the significance and salience of contributing to a winning team. We are five individuals who may vigorously debate questions and issues – the “how” – meaning the path that we will adopt to achieve common goals. We are, however, undivided, unified in our understanding of “why” or the reason that we serve. Our preeminent commodity and derivatives markets are esteemed by many around the world. Our task is to maintain and improve the integrity of our financial markets. We can vigorously debate “how”, but we must never lose sight of “why” we work to achieve this goal.

For many sectors of our economy, value is based on the production of real goods and services that travel through the stream of commerce to every corner of our nation and the four corners of the earth. To that end, investments are critical to maintaining and improving energy infrastructure. Investments in energy infrastructure are critical to our economy.

President Biden recently signed the bipartisan infrastructure bill.[1]  Among other investments, the law allocates $65 billion to upgrade the electric transmission grid infrastructure to improve system reliability and resiliency, and to facilitate the expansion of renewables and clean energy. [2] Funding will be distributed to harden the transmission grid to reduce risks caused by wildfires, hurricanes, and other disruptive events, and to build out thousands of miles of new transmission lines.[3] The bill represents the most significant government commitment to infrastructure since the building of the US highway system after WWII. That includes that 1,500 mile stretch of highway rising from Laredo, TX and passing through my hometown, through where you are, and reaching up to Duluth, Minnesota.  Last month, I spent a week traveling through north, central and south Texas visiting with energy producers, traders, and family ranchers who have been in the business for generations. This expenditure is part of or legacy – one that we leave for future generations.

Investing to create long-lived assets that are supposed to last for decades is difficult if one cannot predict the cost to build, maintain, and replace infrastructure resources. The complexity of planning for capital expenditures associated with energy production cannot be overstated. Price volatility, particularly inflationary volatility, may engender challenges for commodity producers.[4] When derivatives markets work well, they offer an essential mechanism to mitigate or transfer risk and manage pricing. This, I would point out, is an element of the reason “why” we serve.

During today’s meeting, you are also planning to discuss the role of the metals market as components in transitional energy sources as well as the potential impact on financial markets regulated by the CFTC. Here, it is important to note that our markets are global. Geopolitical events in Europe, specifically, the invasion of Ukraine has led to remarkable disruptions in energy and agriculture markets.

Have we successfully identified transitional energy sources? Do we have access to these resources or the components that will make it possible to power our farms, schools, churches, universities, and businesses?

For many of the issues that you will discuss, the solution may be elusive and even difficult to identify or define. If the solutions were easy to find, by now, we might have identified and implemented them. Yet, this is the right time to begin asking hard questions and facing difficult truths and preparing for the future that we want to build. Again, we may not agree immediately on the path or “how,” but we can agree today on the reasons “why.”

Thank you again for allowing me to join you. I look forward to the thoughtful dialogue and discussion of today’s meeting.