Statements on Introduced Bills and Joint Resolutions
April 1, 2004
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. DEWINE (for himself, Mr. KOHL, Mr. GRASSLEY, Mr. SCHUMER, Mr. SPECTER, Mr. FEINGOLD, Mr. LEAHY, and Mr. COLEMAN):
S. 2270. A bill to amend the Sherman Act to make oil-producing and exporting cartels illegal; to the Committee on the Judiciary.
Mr. DEWINE. Mr. President, I wish to talk this afternoon about a bill that my colleagues, Senator KOHL, Senator GRASSLEY, Senator FEINGOLD, Senator SPECTER, Senator SCHUMER, Senator LEAHY, Senator COLEMAN, and I are introducing, which is called the No Oil Producing and Exporting Cartels Act of 2004. We are introducing this bill to address the longstanding problem of foreign governments acting in the commercial arena to fix, allocate, and establish production and price levels of petroleum products.
Every consumer in America knows that gasoline prices have reached record highs over the last couple of weeks. The national average has reached a new record high for self-serve unleaded gas. That is approximately $1.80 per gallon. But over the last week in my home State of Ohio gas prices have been even higher. In Marietta, gas was $1.84; in Cleveland, $1.86; in Columbus, it topped out at $1.88 in some stations. Many analysts predict that prices could get as high as $2 per gallon, or higher, by the summer.
This is of particular interest to me because Ohio and the Midwestern States always seem to be hit especially hard by gas prices spikes. These spikes are acutely painful to persons who commute long distances and to those who live on fixed incomes such as the elderly.
What is the cause? Certainly there are many causes, but as we might expect, there are a number of factors at play. But there is surprising agreement among industry experts about the primary cause of high gas prices and that is the increase in imported crude oil prices.
We also know the biggest factor in setting crude oil prices is OPEC. The unacceptably high price of imported crude oil is a direct result of collusive agreements among OPEC nations to maintain the price of oil.
Despite the fact that gasoline prices are going through the roof, OPEC members met yesterday in Austria and decided to cut the output of oil even further. We have been through this process more than enough to know what that means for the American consumer. When demand is high and supplies are cut, that obviously means higher prices. That is exactly what OPEC did to us yesterday. It ripped off American consumers by raising gas prices even more.
this is an outrage. In fact, OPEC is probably the most notorious example of an illegal cartel in the world today, even at a time when it is widely understood that such conduct is counterproductive and ill-suited for our global economy. Supreme Court Justice Scalia in a recent case described collusion among competitors as "the supreme evil of antitrust." Nation after nation has adopted antitrust enforcement principles that recognize the illegality of price fixing and output restrictions among competitors. In 1998, the Organization for Economic Cooperation and Development, then composed of twenty-nine member nations, issued a formal recommendation denouncing price fixing. OPEC's continued actions, in ongoing defiance of American and international antitrust principles, should not be tolerated.
Until now, however, OPEC has effectively received special treatment under U.S. antitrust laws-despite the fact that oil is a commodity that touches the lives of nearly every American consumer. It is time that we take steps to assure that oil is subject to the principles of the free market. The bill that we are introducing today would do just that and help in the fight to lower gas prices.
Senator KOHL and I have introduced this bill twice before-in 2000 and 2001. It is an idea whose time has come. The purpose of our NOPEC bill is simple-it would treat OPEC like any other cartel. If OPEC were a group of private companies colluding on prices, the executives could be prosecuted and sent to jail, and the firms would pay millions of dollars in fines or maybe even billions in fines. Unfortunately, however, for years enforcement has been constrained by two related court opinions.
In 1979, a Federal District Court found that OPEC's price-setting decisions were "governmental" acts and accordingly that they were given sovereignty status and protected by the Foreign Sovereign Immunities Act. Subsequently, in 1981, a Federal Court of Appeals declined to consider the appeal of that antitrust case based on the so-called "act of state" doctrine.
NOPEC would effectively reverse these decisions by making it clear that OPEC's activities are not protected by sovereign immunity and that the Federal courts should not decline to hear such a case based on the "act of state" doctrine. As a result, under NOPEC, the Department of Justice and the Federal Trade Commission could bring a legal antitrust enforcement action against foreign states engaging in the restraint of trade regarding oil and other petroleum products. Simply put, NOPEC assures that our U.S. antitrust agencies have jurisdiction and authority to bring such cases.
We don't intend to give up the fight for lower gasoline prices. Today, I want the members of OPEC to hear a message loud and clear-we won't quit fighting for American consumers. When OPEC wants to do business with America, it must abide by our antitrust laws.
I ask unanimous consent that the text of the bill be printed in the RECORD.
There being no objection, the bill was ordered to be printed in the RECORD, as follows:
S. 2270
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the "No Oil Producing and Exporting Cartels Act of 2004 " or "NOPEC".
SEC. 2. SHERMAN ACT.
The Sherman Act (15 U.S.C. 1 et seq.) is amended by adding after section 7 the following:
"SEC. 7A. OIL PRODUCING CARTELS.
"(a) IN GENERAL.-It shall be illegal and a violation of this Act for any foreign state, or any instrumentality or agent of any foreign state, to act collectively or in combination with any other foreign state, any instrumentality or agent of any other foreign state, or any other person, whether by cartel or any other association or form of cooperation or joint action-
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"(1) to limit the production or distribution of oil, natural gas, or any other petroleum product;
"(2) to set or maintain the price of oil, natural gas, or any petroleum product; or
"(3) to otherwise take any action in restraint of trade for oil, natural gas, or any petroleum product;
when such action, combination, or collective action has a direct, substantial, and reasonably foreseeable effect on the market, supply, price, or distribution of oil, natural gas, or other petroleum product in the United States.
"(b) SOVEREIGN IMMUNITY.-A foreign state engaged in conduct in violation of subsection (a) shall not be immune under the doctrine of sovereign immunity from the jurisdiction or judgments of the courts of the United States in any action brought to enforce this section.
"© INAPPLICABILITY OF ACT OF STATE DOCTRINE.-No court of the United States shall decline, based on the act of state doctrine, to make a determination on the merits in an action brought under this section.
"(d) ENFORCEMENT.-The Attorney General of the United States and the Federal Trade Commission may bring an action to enforce this section in any district court of the United States as provided under the antitrust laws.".
SEC. 3. SOVEREIGN IMMUNITY.
Section 1605(a) of title 28, United States Code, is amended-
(1) in paragraph (6), by striking "or" after the semicolon;
(2) in paragraph (7), by striking the period and inserting "; or"; and
(3) by adding at the end the following:
"(8) in which the action is brought under section 7A of the Sherman Act.".