E2 Round-up: Iraqi oil, U.S. nuclear waste, and policing the energy markets

“The new contracts will put the companies into direct contact with an Iraqi government that has frequently acknowledged its own challenges in dealing with corruption and cronyism, and that has a lack of experienced managers, adequate enforcement and efficient auditing systems,” it adds.

Back in the U.S., the Wall Street Journal shows that killing a big infrastructure project brings its own set of challenges.

The paper highlights a disagreement between the Energy Department and the White House Office of Management and Budget over how to terminate the proposed Yucca Mountain nuclear waste repository in Nevada.

The Obama administration is walking away from the project, a big victory for Senate Majority Leader Harry Reid (D-Nev.), who along with many other Nevada officials has long opposed Yucca. But breaking up is hard to do, both legally and logistically.

A big story to watch Thursday is a long-awaited proposal by the Commodity Futures Trading Commission that would set restrictions, called position limits, on the number of futures contracts that traders may hold in oil and other energy commodity markets.

The proposal is a response to concerns that large speculative bets by hedge funds and other investors have contributed to big price swings in recent years and eroded market stability.

The policy is a turnaround from the Bush administration, which essentially rejected the notion that speculators were playing a role in driving prices, and instead argued that supply-and-demand and other “market fundamentals” were the overwhelming factors.

But this Bloomberg story that sets the table for the CFTC proposal suggests that regulators might not get all that aggressive.

“It’s likely that the limits that they set will be pretty liberal and generous,” said Craig Pirrong, director of the Global Energy Management Institute at the University of Houston. “The main issue will be how generous the exemptions will be for swap dealers and other financial market participants.”