Q: What is OPEC?
A: The Organization of the Petroleum Exporting Countries, commonly known as OPEC, launched in 1960 by founding members Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Nearly six decades later, the international, 15-member organization accounts for more than 73 percent of the world’s crude oil reserves, according to the U.S. Energy Information Administration. OPEC’s mission is to “coordinate and unify the petroleum policies of its member countries and ensure the stabilization of oil markets, in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry.” For nearly two decades, OPEC has engaged in efforts to control the supply of oil, often resulting in price increases for consumers. Most recently, OPEC and its allies, including Russia, cut production by about 1.8 billion barrels per day. This move triggered an international price swing, lifting prices to more than $80 a barrel at the start of summer.
Q: What is Congress doing to stop price fixing?
A: For starters, the United States has been working for many years to develop a domestic, all-of-the-above energy strategy to reduce our reliance on foreign oil. This is best for the U.S. economy, including consumers and taxpayers, as well as national security. U.S. producers have tapped into new oil reserves, with the largest in Texas and North Dakota, using advanced technologies, including horizontal drilling and hydraulic fracturing. In fact, oil and natural gas exports are setting new records. U.S. oil production recently hit a record-setting 11 million barrels per day, according to preliminary estimates by the U.S. Energy Information Administration. Our U.S. energy policy also fosters development of alternative energy resources such as solar, wind and nuclear power, as well as renewable biofuels. Biofuels help displace foreign oil and give consumers more choices at the pump. However, America is not yet fully energy independent. In 2017, the U.S. imported 3.4 million barrels a day from OPEC countries. American consumers shouldn’t be at the mercy of OPEC at the pump. That’s why I’m working to cut OPEC’s stranglehold on consumers.
OPEC’s coordinated efforts to influence the global supply of oil have gone on for too long. For nearly two decades, I have been advocating to hold OPEC to account through legislative efforts. As chairman of the Senate Judiciary Committee, I recently reintroduced the No Oil Producing and Exporting Cartels Act, also known as NOPEC. This bipartisan and bicameral legislation would amend the Sherman Antitrust Act of 1890 and allow the United States government to take action against price fixing by foreign governments. It would allow the Department of Justice to bring lawsuits against oil cartel members for antitrust violations. It would clarify that neither sovereign immunity nor the “Act of State” doctrine prevents a court from ruling on antitrust charges brought against foreign governments for engaging in the illegal pricing, production and distribution of petroleum products.
This bill has a long history. It was first introduced in 2000 and has been reintroduced numerous times, earning overwhelming support in both the House of Representatives and Senate. Once again, we are putting OPEC on notice. Our bipartisan NOPEC legislation certainly will get the president’s attention and send a signal that the United States will not tolerate OPEC’s flagrant antitrust violations.