II Calendar No. 416 109th CONGRESS 2d Session S. 2557 IN THE SENATE OF THE UNITED STATES April 6, 2006 Mr. Specter (for himself, Mr. Kohl, Mr. DeWine, Mr. Leahy, Mrs. Feinstein, Mr. Durbin, Mr. Lieberman, Mr. Biden, and Mr. Feingold) introduced the following bill; which was read twice and referred to the Committee on the Judiciary April 27, 2006 Reported by Mr. Specter, without amendment A BILL To improve competition in the oil and gas industry, to strengthen antitrust enforcement with regard to industry mergers, and for other purposes.

1.

Short title

This Act may be cited as the Oil and Gas Industry Antitrust Act of 2006.

2.

Prohibition on unilateral withholding

The Clayton Act (15 U.S.C. 12 et seq.) is amended— (1)by redesignating section 28 as section 29; and (2)by inserting after section 27 the following:

28.

Oil and natural gas

(a)

In general

Except as provided in subsection (b), it shall be unlawful for any person to refuse to sell, or to export or divert, existing supplies of petroleum, gasoline, or other fuel derived from petroleum, or natural gas with the primary intention of increasing prices or creating a shortage in a geographic market. (b)

Considerations

In determining whether a person who has refused to sell, or exported or diverted, existing supplies of petroleum, gasoline, or other fuel derived from petroleum or natural gas has done so with the intent of increasing prices or creating a shortage in a geographic market under subsection (a), the court shall consider whether— (1)the cost of acquiring, producing, refining, processing, marketing, selling, or otherwise making such products available has increased; and (2)the price obtained from exporting or diverting existing supplies is greater than the price obtained where the existing supplies are located or are intended to be shipped.

.

3.

Review of Clayton Act

(a)

In general

The Attorney General and the Chairman of the Federal Trade Commission shall conduct a study, including a review of the report submitted under section 4, regarding whether section 7 of the Clayton Act should be amended to modify how that section applies to persons engaged in the business of exploring for, producing, refining, or otherwise processing, storing, marketing, selling, or otherwise making available petroleum, gasoline or other fuel derived from petroleum, or natural gas. (b)

Report

Not later than 270 days after the date of enactment of this Act, the Attorney General and the Chairman of the Federal Trade Commission shall submit a report to Congress regarding the findings of the study conducted under subsection (a), including recommendations and proposed legislation, if any.

4.

Study by the government accountability office

(a)

Definition

In this section, the term covered consent decree means a consent decree— (1)to which either the Federal Trade Commission or the Department of Justice is a party; (2)that was entered by the district court not earlier than 10 years before the date of enactment of this Act; (3)that required divestitures; and (4)that involved a person engaged in the business of exploring for, producing, refining, or otherwise processing, storing, marketing, selling, or otherwise making available petroleum, gasoline or other fuel derived from petroleum, or natural gas. (b)

Requirement for a study

Not later than 180 days after the date of enactment of this Act, the Comptroller General of the United States shall conduct a study evaluating the effectiveness of divestitures required under covered consent decrees. (c)

Requirement for a report

Not later than 180 days after the date of enactment of this Act, the Comptroller General shall submit a report to Congress, the Federal Trade Commission, and the Department of Justice regarding the findings of the study conducted under subsection (b). (d)

Federal agency consideration

Upon receipt of the report required by subsection (c), the Attorney General or the Chairman of the Federal Trade Commission, as appropriate, shall consider whether any additional action is required to restore competition or prevent a substantial lessening of competition occurring as a result of any transaction that was the subject of the study conducted under subsection (b).

5.

Joint Federal and State task force

The Attorney General and the Chairman of the Federal Trade Commission shall establish a joint Federal-State task force, which shall include the attorney general of any State that chooses to participate, to investigate information sharing (including through the use of exchange agreements and commercial information services) among persons in the business of exploring for, producing, refining, or otherwise processing, storing, marketing, selling, or otherwise making available petroleum, gasoline or other fuel derived from petroleum, or natural gas (including any person about which the Energy Information Administration collects financial and operating data as part of its Financial Reporting System).

6.

No oil producing and exporting cartels

(a)

Short title

This section may be cited as the No Oil Producing and Exporting Cartels Act of 2006 or NOPEC. (b)

Sherman Act

The Sherman Act (15 U.S.C. 1 et seq.) is amended— (1)by redesignating section 8 as section 9; and (2)by inserting after section 7 the following:

8.

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, in the circumstances described in subsection (b), 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— (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. (b)

Circumstances

The circumstances described in this subsection are an instance when an action, combination, or collective action described in subsection (a) 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. (c)

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. (d)

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. (e)

Enforcement

The Attorney General of the United States may bring an action to enforce this section in any district court of the United States as provided under the antitrust laws, as defined in section 1(a) of the Clayton Act (15 U.S.C. 12(a)).

. (c)

Sovereign immunity

Section 1605(a) of title 28, United States Code, is amended— (1)in paragraph (6), by striking or at the end; (2)in paragraph (7), by striking the period at the end and inserting ; or; and (3)by adding at the end the following: (8)in which the action is brought under section 8 of the Sherman Act. .

April 27, 2006 Reported without amendment