Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 2264) to amend the Sherman Act to make oil-producing and exporting cartels illegal, as amended. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days…
Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 2264) to amend the Sherman Act to make oil-producing and exporting cartels illegal, as amended.
Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days within which to revise and extend their remarks and include extraneous material on the bill now under consideration.
Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, gas prices have now reached an all-time record high, topping even the 1981 spike in price that had stood as the record high for 26 years. According to the Energy Information Administration, the nationwide price of unleaded regular gas hit $3.22 a gallon, 11.5 cents higher than last week's price. In Michigan, it is even higher than that.
Today's record-breaking price, one in an unending series of continuous price hikes over the past month, is hurting Americans in their pocketbooks, and we have got to do something about it. Retailers across the Nation are saying that soaring gas prices are prompting consumers to cut back on their shopping trips and their purchases.
We are told this won't be the end of these skyrocketing price hikes either. The AAA forecasts that more record prices are probably on the way, especially as the summer begins, which is usually the busiest driving season of the year.
In Michigan, gas prices have reached their highest levels ever at $3.27 a gallon. Michigan is now the third most expensive State for gasoline in the country, behind California and the State of Illinois.
Last week, in an effort to help address this crisis, the House Judiciary Committee's Antitrust Task Force examined the OPEC cartel and its impact on the price of gas. OPEC accounts for two-thirds of the world's oil reserves and more than 40 percent of the world's oil production, but, even more significantly, OPEC oil exports represent 70 percent of all the oil traded internationally.
You know what that means. This affords OPEC, obviously, considerable control over the global market. Its net oil export revenues should reach nearly $395 billion in this year alone, and its influence on the oil market is dominant, especially when it decides to increase or reduce the levels of production.
For years now, OPEC's price-fixing conspiracy, and that is what I call it, a conspiracy, has unfairly driven up the price and cost of imported crude oil to satisfy the greed of oil exporters. We have long decried OPEC, but, sadly, the administration has done little or nothing to stop this.
So now the time has come. It is time for us to do something to point them in the right direction. We have got to get ahold of this economic crisis. The cries are rising up in every congressional district in the Nation, so your Committee on the Judiciary has produced H.R. 2264, with the help of Mr. Chabot and Mr. Keller and other Members, to make clear that the oil cartel nations that are colluding to limit crude oil production as a means of fixing its price is illegal under United States law, just as it would be for any company engaging in the same conduct.
It clarifies and reaffirms the law in several critical respects:
First, it exempts OPEC and other nations from the provisions of the Foreign Sovereign Immunities Act to the extent those governments are engaged in price fixing and other anticompetitive activities.
Second, H.R. 2264 makes clear that the so-called ``act of state'' doctrine does not in any way prevent courts from ruling on antitrust charges brought against foreign governments, and that foreign governments are ``persons'' subject to suit under the antitrust laws.
Third, it explicitly authorizes the Department of Justice to bring lawsuits in Federal court against oil cartel members.
Ladies and gentlemen, we, on behalf of the American people, have had enough. These price rises are not something that we have to merely humbly drive into the gas station and look at the new, increased cost. We don't have to stand by and watch OPEC dictate the price of our gas without any recourse whatsoever. We can do something about it to combat this blatantly anticompetitive, anticonsumer behavior, and we are.
I urge Members to carefully consider the legislation that is now being debated on the House floor.
Mr. Speaker, I reserve the balance of my time.
Mr. Speaker, I yield such time as she may consume to the gentlewoman from California (Ms. Zoe Lofgren) whose State has been most affected by the subject matter we are here on the floor considering.
Mr. Speaker, I yield such time as she may consume to the distinguished Judiciary member from Texas (Ms. Jackson-Lee).
How much time remains, Mr. Speaker?
Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from New York (Mr. Bishop).
Mr. Speaker, may I close with this observation. It was in 1978 that the International Association of Machinists and Aerospace Workers sued OPEC under the Sherman Antitrust Act, but the case was rejected because the Court said that OPEC could not be prosecuted under the Sherman Act due to the foreign sovereign immunity protection clause it claimed for its member states.
I'm here to announce on the floor, as modestly as I can, that that decision was in error. Government-owned companies that engage in purely business activities do not warrant sovereign immunity protection according to prevailing legal doctrines, and so what we do in this measure is that we don't start a lawsuit against OPEC. We merely authorize for the first time by law the Department of Justice to, when in their good judgment they choose to be able to do that.
These high prices facilitated by OPEC serve to transfer wealth from Western consumers to petroleum producers, and I have this on the very conservative words of the Heritage Foundation itself. I will insert this in the Record at this point.
[From The Heritage Foundation, May 21, 2007]
Time for Congress To Lift OPEC's Immunity
(By Ariel Cohen)
This week, the House is likely to pass the No Oil Producing
and Exporting Cartels Act of 2007 (NOPEC, H.R. 2264). This
bill, sponsored by Representatives John Conyers (D-MI) and
Steve Chabot (R-OH), would allow the federal government to
sue the Organization for Petroleum Exporting States (OPEC)
for antitrust violations. Similar legislation (S. 879) is
pending in the Senate, sponsored by Senators Herb Kohl (D-WI)
and Arlen Spector (R-PA). At a time when oil prices are
climbing to ever-higher levels, fighting OPEC's
anticompetitive practices would be a welcome first step
towards reestablishing the free market in this strategically
important sector. This is long overdue and points the way
toward a second step: allowing private antitrust suits
against OPEC.
The Intolerable Status Quo. Since its inception in 1960,
OPEC, which is dominated by Persian Gulf producers, has
successfully restricted its member states' petroleum
production, artificially distorting the world's oil supply to
line its members' pockets. Member states' production quotas
are determined at semi-annual meetings of members' petroleum
ministers and are at times changed through telephone
consultations. Several times, this supply-fixing strategy has
brought devastation to the U.S. and global economies:
In 1973, OPEC's actions in response to U.S. support for
Israel, which was attacked in the Yom Kippur War, resulted in
a worldwide economic recession that lasted from 1974 to 1980.
In 1980, OPEC's failure to increase production in the face
of the Iranian revolution resulted in historically high oil
prices of $81 per barrel (in 2005 dollars).
In 1990, OPEC refused to increase production sufficiently
to keep prices stable as Saddam Hussein occupied Kuwait.
Lately, OPEC's resistance to add productive capacity has
sent oil prices to $70 a barrel, once again endangering
economic growth worldwide.
The cartel's operations ensure that its members' oil and
gas economies remain insulated from foreign investment flows.
Members of OPEC have not worked to enhance the rule of law
and property rights and have imposed severe restrictions to
prevent foreign investors from owning upstream production
assets (oil fields and pipelines). This is a testament to the
cartel's de facto monopoly over the petroleum market. Indeed,
the only serious challenge to the organization came in 1978
when a U.S. non-profit labor association, the International
Association of Machinists and Aerospace Workers (IAM), sued
OPEC under the Sherman Antitrust Act, in IAM v. OPEC. But the
case was rejected in 1981 by the U.S. Court of Appeals for
the Ninth Circuit. OPEC, the court affirmed, could not be
prosecuted under the Sherman Act due to the foreign sovereign
immunity protection it claimed for its member states.
That decision was wrong. Government-owned companies that
engage in purely business activities do not warrant sovereign
immunity protection according to prevailing legal doctrines.
High oil prices, which OPEC facilitates, serve to transfer
wealth from Western consumers to petroleum producers. This
wealth transfer funds terrorism through individual oil wealth
and government-controlled ``non-profit'' foundations. It also
permits hundreds of millions of dollars to be spent on
radical Islamist education in madrassahs (Islamic religious
academies).
Furthermore, the oil-cash glut in the Gulf states and
elsewhere empowers resistance to much-needed economic reform
in oil-producing countries. State subsidies for everything
from health care to industry to bloated bureaucracy continue
unabated, funded by Western consumers.
Congress Gets Into Action. Growing concerns over energy
prices have prompted Congress to examine the legal hurdles
that prevent the United States from defending its economic
and national security interests.
In the early part of 2005, a group of senators led by
Senator Mike DeWine (R-OH) introduced the ``No Oil Producing
and Exporting Cartels Act'' (S. 555), known as NOPEC, to
amend the Sherman Act to make oil-producing and exporting
cartels illegal.
The bill has now returned the Senate calendar. The House
and Senate now have a unique opportunity to:
Join forces in defending American businesses and consumers.
NOPEC would send a strong and long-overdue signal to OPEC oil
barons that they must stop limiting production and investment
access.
Allow private suits against OPEC. If OPEC is to be reined
in, individuals and companies that it has damaged must also
be allowed to bring suits against the cartel. As the
International Association of Machinists (IAM) v. OPEC made
clear, Congress must amend the Sherman Act to allow these
suits. Reform should not begin and with the DeWine-Kohl
legislation.
Conclusion. The No Oil Producing and Exporting Cartels Act
of 2007 would place much needed pressure on OPEC. It is time
for the cartel to cease its monopolistic practices. Otherwise
the American People can expect more of the same from OPEC--
insufficient production and higher energy bills.
Mr. Speaker, I yield back the balance of my time.
Mr. Speaker, on that I demand the yeas and nays.