[Congressional Record (Bound Edition), Volume 152 (2006), Part 5]
[Extensions of Remarks]
[Page 6974]
[From the U.S. Government Publishing Office, www.gpo.gov]




   INTRODUCTION OF THE ``OIL AND GAS INDUSTRY ANTITRUST ACT OF 2006''

                                 ______
                                 

                         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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