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“INTRODUCTION OF THE ``OIL AND GAS INDUSTRY ANTITRUST ACT OF 2006''” mentioning the U.S. Dept. of Justice was published in the Extensions of Remarks section on pages E710-E711 on May 3, 2006.
The publication is reproduced in full below:
INTRODUCTION OF THE ``OIL AND GAS INDUSTRY ANTITRUST ACT OF 2006''
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HON. JOHN CONYERS, JR.
of michigan
in the house of representatives
Wednesday, May 3, 2006
Mr. CONYERS. Mr. Speaker, today I am introducing the ``Oil and Gas Industry Antitrust Act of 2006,'' legislation that prohibits oil and gas companies from unilaterally withholding supply with the intent of raising prices or creating a shortage and subjects the OPEC nations to the U.S. antitrust laws. I am joined by Representatives Chabot, Lofgren, Brown (OH), Meehan, Schiff, Lee, and Hinchey.
In recent days, the price of crude oil has reached an all-time high of $75 per barrel, more than twenty percent higher than the price at the start of the year. This increase is directly felt by American consumers, who consume over 40 percent of the world's gasoline and are forced to pay exorbitant prices at the pump. The average price of gasoline is now near $3 a gallon or more and is only expected to rise further during the summer months as supply dwindles.
There are two parts of this equation--the oil side and the refinery side--and both must be addressed for consumers to see a difference at the pump.
The Oil Problem: The group of eleven nations comprising OPEC is a classic definition of a cartel, and these nations hold all the cards when it comes to oil and gas prices. OPEC accounts for more than a third of global oil production, and OPEC's oil exports represent about 55 percent of the oil traded internationally. This makes OPEC's influence on the oil market dominant, especially when it decides to reduce or increase its levels of production. Just recently, OPEC ministers announced that they would not increase production or even offer their spare oil capacity to respond to rapidly increasing oil prices. While OPEC is in a unique position to respond to and alleviate this crisis, its nations will instead stand by while our oil and gasoline prices go through the roof.
The Refinery Problem: Refining costs are the second largest chunk of the cost of a gallon of gasoline. And while companies like ExxonMobil are posting first-quarter profits that are up 7 percent from a year ago, the cost of gasoline continues to rise. In this climate--and with increasing reliance on foreign oil--we must be particularly vigilant in safeguarding consumers from potential exploitation.
The Solution: This comprehensive legislation, the ``Oil and Gas Industry Antitrust Act of 2006,'' is simple and effective, and has already been passed by a U.S. Senate Committee. It:
Amends the Clayton Act to prohibit oil and gas companies from unilaterally withholding supply with the intent of raising prices or creating a shortage.
Directs several studies, including a Justice Department/FTC study of mergers in the oil and gas industry, and a GAO study of whether government consent decrees in oil mergers have been effective.
Directs the Attorney General and FTC Chairman to establish a joint federal/state task force with state AG's to investigation information sharing among oil companies.
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 with regard to pricing, production and distribution of petroleum products. (OPEC currently claims sovereign immunity by saying its actions are
``governmental activity,'' which is protected, rather than ``commercial activity,'' which is not.)
Makes clear that the so-called ``Act of State'' doctrine does not prevent courts from ruling on antitrust charges brought against foreign governments and that foreign governments are ``persons'' subject to suit under the antitrust laws.
Authorizes lawsuits in U.S. federal court against oil cartel members by the Justice Department.
We do not have to stand by and watch gas prices continue to climb without taking action; we should protect consumers from any anticompetitive behavior that might be occurring. I am hopeful that Congress can move quickly to enact this worthwhile and timely legislation.
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