[Congressional Record (Bound Edition), Volume 153 (2007), Part 10]
[House]
[Pages 13496-13501]
[From the U.S. Government Publishing Office, www.gpo.gov]




           NO OIL PRODUCING AND EXPORTING CARTELS ACT OF 2007

  Mr. CONYERS. 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.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 2264

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

        This Act may be cited as the ``No Oil Producing and 
     Exporting Cartels Act of 2007'' or ``NOPEC''.

     SEC. 2. SHERMAN ACT.

        The Sherman Act (15 U.S.C. 1 et seq.) is amended by adding 
     after section 7 the following:
       ``Sec. 7A. (a) It shall be illegal and a violation of this 
     Act for any foreign state, or any instrumentality or agent of 
     any foreign state, 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;

     when such action, combination, or collective action 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.
       ``(b) 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.
       ``(c) 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.
       ``(d) 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.''.

     SEC. 3. SOVEREIGN IMMUNITY.

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

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Michigan (Mr. Conyers) and the gentleman from Florida (Mr. Keller) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Michigan.


                             General Leave

  Mr. CONYERS. Mr. Speaker, I ask unanimous consent that all Members

[[Page 13497]]

have 5 legislative days within which to revise and extend their remarks 
and include extraneous material on the bill now under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Michigan?
  There was no objection.
  Mr. CONYERS. 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.

                              {time}  1230

  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. KELLER of Florida. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, it is painfully obvious to the American people that the 
price of gasoline is going up. The nationwide average for regular, 
unleaded gas is at a record $3.20 a gallon, according to AAA, up almost 
34 cents from a month ago, and the peak summer driving season hasn't 
even started yet. The American people are mad as heck, and they don't 
want to take it anymore.
  To heck with OPEC. How about NOPEC? That's what this legislation is 
all about.
  Last week, the Antitrust Task Force of the House Judiciary Committee, 
on which I serve, held a hearing on prices at the pump, market failure, 
and the oil industry. The experts at this hearing, including the 
Connecticut attorney general, Mr. Blumenthal, insisted we do something 
about the OPEC cartel.
  The price of gasoline at the pump closely tracks the price of a 
barrel of oil on the world oil market. That is because the price of 
crude oil comprises 56 percent of the cost of a gallon of gasoline. 
American refineries, which import over 60 percent of their oil from 
foreign countries, compete for those oil resources with China and 
India. Demand for oil in those two countries has dramatically increased 
in recent years. As the demand has increased at home and abroad, 
supplies have not kept up and the price of oil has gone up.
  Complicating this problem is the fact that we haven't built a 
refinery in this country in 30 years. And recent, unexpected refinery 
shutdowns have constricted supply. Of course, there are also 
anticompetitive forces in play that manipulate the law of supply and 
demand to their selfish benefit and our detriment.
  For example, the world oil price is dictated mainly by the quantity 
of oil that the Organization of Petroleum Exporting Countries, or OPEC, 
is willing to supply. The 11 current OPEC members account for 40 
percent of the world oil production and about two-thirds of the world's 
proven oil reserves. Most would argue that the presence of this cartel, 
controlled in large part by totalitarian or hostile regimes like Iran 
and Venezuela, is not helpful.
  The question is: What can Congress do about it? NOPEC is one possible 
solution to this problem. Because of the ``act of state'' doctrine and 
the concept of sovereign immunity, Americans are precluded from suing 
the cartel that controls a good portion of the world's oil supply. This 
bill would change that.
  Under this NOPEC legislation, the U.S. Attorney General would be 
allowed to bring an antitrust lawsuit against the oil cartel members 
for collusion, price fixing, and other anticompetitive activities 
designed to gouge American consumers.
  I want to thank the gentleman from Ohio (Mr. Chabot), the gentleman 
from Michigan (Mr. Conyers) and the gentlewoman from California (Ms. 
Zoe Lofgren) for their leadership on this NOPEC legislation.
  I would point out, in the interest of straight talk, that the White 
House this morning issued a statement saying that the President will 
veto the NOPEC legislation. I would point out that they misspelled the 
word ``President'' in this release; President is spelled P-R-E-S-E-N-T. 
Apparently, the White House cares even less about spell-check than they 
do about OPEC with regard to this matter.
  I would urge my colleagues on both sides of the aisle to do something 
about OPEC's price fixing misbehavior and vote ``yes'' on H.R. 2264.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CONYERS. Mr. Speaker, I yield such time as she may consume to the 
gentlewoman from California (Ms. Zoe Lofgren) whose State has been most

[[Page 13498]]

affected by the subject matter we are here on the floor considering.
  Ms. ZOE LOFGREN of California. Mr. Speaker, I am pleased to be a 
cosponsor of this important bill and believe it is sound legislation 
that the House should adopt today.
  If private actors collusively controlled supply and prices in the 
manner that OPEC member nations do, there is no question that their 
conduct would be illegal as a per se violation of the Sherman Act, and 
they would be subject to criminal and civil liability. Typically, 
however, foreign states are immune from suit in Federal court. Section 
1604 of title 28 of the United States Code provides that a foreign 
state shall be immune from the jurisdiction of the courts of the United 
States and of the States, with some specific exceptions. One exception 
is where the suit is based upon a commercial activity carried on in the 
United States by the foreign state, or upon an act performed in the 
United States in connection with a commercial activity of the foreign 
state elsewhere, or upon an act outside of the territory of the United 
States in connection with a commercial activity of the foreign state 
elsewhere and that causes a direct effect in the United States.
  I think it is quite clear that the OPEC collusion falls within the 
current exception.
  So why is this bill, this law, necessary? A district court has held 
otherwise, and it is important that the Congress reaffirm that the 
antitrust laws do indeed apply to OPEC nations in their role as 
commercial actors engaging in such collusion where such conduct impacts 
the United States.
  Another obstacle to antitrust lawsuits against OPEC is the so-called 
``act of state'' doctrine which has been used by the Ninth Circuit in 
affirming the dismissal of the case that was wrongly decided.
  H.R. 2264 minimizes any ``act of state'' doctrine concerns by making 
sure and entrusting to the executive branch the discretion whether to 
bring charges under this provision. A court's concern about any 
insinuation of itself into matters properly within the bailiwick of the 
political branches is mitigated when Congress, by this legislation, and 
the executive branch, by bringing the action, explicitly authorize 
judicial involvement.
  Much has been said about the price of gas today. It is high, and I 
think we all hear from our constituents about it. But there is another 
reason why manipulation of the market is bad for America. We know that 
for our long-term future we have to develop energy alternatives. We 
cannot continue to drill and continue to be dependent upon the Middle 
East for oil.
  So long as it is possible for OPEC to manipulate rapidly the price of 
crude, they have it within their power to really destroy markets for 
alternative energy, and therefore, make it even harder for us to escape 
from the oily grasp of OPEC.
  We need to make sure that these misdeeds are prevented by adopting 
this legislation. This is a good bill for consumers, for people in 
California that are complaining about the cost of gas. It is a good 
bill for those who want to move away from oil to alternative energies 
and who need to avoid the manipulation of the market by OPEC that for 
many years has kept us from that goal.
  I hope that this bill, which is an important first step, will not be 
vetoed by the President. I think it would be a shame if he were to 
prevent this relief for the traveling public, and also this hope for 
those of us who want to fight global climate change through the use and 
development of alternative energy sources.
  I thank the gentleman for recognizing me.
  Mr. KELLER of Florida. Mr. Speaker, I yield such time as he may 
consume to the gentleman from Ohio (Mr. Chabot) who is the lead 
Republican cosponsor of NOPEC and has worked hard on this legislation 
for 3 years.
  Mr. CHABOT. I thank the gentleman for yielding.
  Mr. Speaker, I rise in strong support of H.R. 2264, the No Oil 
Producing and Exporting Cartels Act of 2007.
  First, I would like to thank the distinguished gentleman from 
Michigan, Chairman Conyers, for his hard work and his leadership on 
this bill. We have worked together in previous Congresses to move this 
bill, and I am very pleased to see it moving on the floor here today.
  I also want to thank the gentlewoman from California (Ms. Zoe 
Lofgren) and the gentleman from Florida (Mr. Keller) for their 
leadership in supporting the passage of this legislation as well.
  Since last week when we first considered this bill, gas prices have 
increased another 10 cents to a record level in this country of over 
$3.27 a gallon. Before heading to the airport to come back here from my 
district in Cincinnati, just yesterday, I filled up in my 1993 Buick 
and it was $3.19 in Cincinnati by the University of Cincinnati, $32. 
And my constituents back home in Cincinnati are very concerned, and 
rightly so, particularly as we enter the peak summer driving season, 
which begins this weekend.
  I happen to have a tele-town hall meeting where hundreds and 
hundreds, probably thousands of people in my district were on the line 
and we were talking about a range of issues, this issue, high gas 
prices in my district. And as Chairman Conyers mentioned, the State of 
Michigan has the highest in the whole country. People are really 
concerned about this; this is really hitting hard and it is something 
that we need to deal with in this Congress.
  I am very disappointed in the President that this message indicates, 
whether or not they know how to spell the word ``President,'' that they 
are going to veto this bill if it is passed. I think we ought to send 
it to the President and let the chips fall where they may. This is long 
overdue legislation. I urge its passage.
  The other issue, by the way, which was of great interest to my 
constituents last night in the tele-town hall meeting was, not 
surprisingly, the immigration issue. We heard the Senate reached an 
agreement just recently on, in my view, an extremely flawed agreement 
which is going to be debated over there and then debated over here. 
Those are the two principal issues my people back in Cincinnati are 
concerned about.
  These continued price hikes take their toll on consumers directly at 
the gas pump, as well as impacting their everyday lives and raising the 
cost of things like going to the grocery store or going to work or even 
planning a vacation. I mean, this is the time when people are deciding 
whether they are going to take the kids to King's Island up the road 
from my district in Cincinnati, or if they are going to go to Disney 
World down in Florida in Mr. Keller's area. But when you have gas 
prices at $3.20-plus per gallon, this is not only going to put a damper 
on vacations and disappointing our kids, but it is significantly going 
to weigh down this economy.
  I think there is no question that if gas prices remain this high, it 
is going to have a significant impact on the economy. Jobs and other 
things are at risk.
  Passing H.R. 2264 would be a positive first step to allaying concerns 
that the American public has expressed about these uncontrollable price 
surges. Over the last decade, it has become alarmingly clear that 
America is far too dependent on foreign oil to meet our energy needs. 
Disturbingly, we import, as some of my colleagues have mentioned, more 
than two-thirds of the oil we consume, much of it from OPEC, and much 
of it from some of the more unstable areas of the world--Iran, Iraq, 
Saudi Arabia, Kuwait, the United Arab Emirates, and of course we get 
some from Nigeria and Venezuela. As Mr. Keller mentioned, we have down 
there Mr. Chavez who seems to be following in the footsteps of Fidel 
Castro. Those are the types of countries that we are depending on for 
our oil, and that has to change.
  At the same time the number of refineries operating in the United 
States has decreased from over 300, 324 to be exact back in 1981, to 
fewer than 150, 148 to be exact. So we have cut the number of 
refineries available in half over that period of time, and we

[[Page 13499]]

haven't built another oil refinery since 1976, over 30 years ago now.
  There is no doubt that we need to focus on both short-term and long-
term strategies to address these issues. We need increased domestic 
production and refining capabilities, and we need to put a stronger 
emphasis on alternative energy and conservation efforts.

                              {time}  1245

  But this strategy to make us less oil-dependent and to put us on more 
sound footing also has to include breaking up the cartels that play a 
primary role in manipulating, and I emphasize manipulating, the market. 
We talk about supply and demand and all that, but OPEC countries are 
manipulating the supply of oil in the world.
  For decades, OPEC nations have conspired, and again I emphasize that, 
conspired to limit supplies and to drive up prices of imported crude 
oil, gouging American consumers, in violation of our Nation's antitrust 
laws. OPEC accounts for more than two-thirds of the global oil 
production and exports more than 65 percent of the oil traded 
internationally. Thus, it's abundantly clear that OPEC's influence in 
the market dominates.
  H.R. 2264, as some of my colleagues have already mentioned, attempts 
to break up this cartel and subject these colluders and their 
anticompetitive practices to the antitrust scrutiny that they so richly 
deserve. Specifically, this bill would amend the Sherman Act to make it 
illegal for foreign countries to collude, to restrain output or fix 
prices of oil, gas or any petroleum product. In addition, this bill 
gives the Attorney General the authority to enforce the antitrust 
provisions against these nations.
  Importantly, the bill also anticipates any protected nation defense 
or immunity that OPEC nations may proffer, specifically exempting them 
from the Foreign Sovereignty Immunities Act if they are engaged in 
price fixing, which they clearly are, or other anticompetitive 
activities with regard to pricing or production or distribution.
  This bill is a necessary and appropriate response to deal with those 
who are not willing to deal fairly with the American consumer. I urge 
my colleagues to support competition and consumers by supporting H.R. 
2264.
  And I want to again thank Mr. Conyers for his leadership in this 
area. It's far overdue that we pass this act.
  Mr. CONYERS. Mr. Speaker, I yield such time as she may consume to the 
distinguished Judiciary member from Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Speaker, first of all, I want to thank 
Chairman Conyers for doing something and looking at this from a 
perspective that is thoughtful, that is embracing and that recognizes 
the largeness of this issue.
  Might I just recount for my colleagues that this is a bipartisan 
bill. Many people have come to the floor of the House or in the 
Judiciary Committee, some are on Science, some are on Energy and 
Commerce, but all of them have faced what I face, being stopped in the 
airport by airport workers, individuals who are hourly wages, and they 
simply say, we can't take it anymore. As I got on the plane, their last 
word was, can you do something about the gasoline prices? Today in 
America, gasoline prices are over $3.20 a gallon--enough is enough!
  As we enter into the summer, we are being told that it's going to get 
worse, higher and higher and higher. The distinguished Speaker said the 
gentlewoman from Texas. I represent what is known as the energy capital 
of the world, and what I would encourage the particular companies that 
I have the privilege of representing, and I have in essence probably 
voted differently from many in this House in supporting the Energy 
Policy Act and a number of initiatives that were supposed to help us 
diversify or help enhance the capacity of our particular companies. 
They were supposed to help build refinery capacity, which I will tell 
you is an issue. I was supposed to applaud offshore development in 
certain areas if it was environmentally safe. We've tried to do 
everything in order to ensure that we have a strong industry, but that 
we provide for those who are in need.
  This legislation simply gives the Attorney General the authority to 
find out about an organization. Many of us have friends that happen to 
be from these particular nations. We are supportive of the engagement 
of these particular nations in the Mideast. We work with them. We've 
traveled there. We encourage engagement on the State Department level. 
We want to be friends, but there has to be a question of whether or not 
OPEC provides itself insulated against antitrust violations such that 
they can gouge or raise prices without any recrimination.
  This is a thoughtful legislative initiative that gives the Attorney 
General of the United States the ability to review whether or not this 
entity violates the antitrust laws.
  You must understand that when the oil comes to the United States, 
even though we may be operators in those foreign countries, some of the 
named companies that you know, some of the ones that you pull up to the 
station, the OPEC sets the prices, and therefore, they look at the 
marketplace to determine how much money they can get out of a suffering 
Nation or suffering world.
  As you well know, one of our trade deficit partners, China, is 
consuming more oil than one might imagine. That bumps the price up. And 
who is the victim? The hardworking citizens in this country, whether 
they live in Houston, Detroit or New York, or whether they are simply 
trying to get little ones to soccer teams, to after-school programs or 
to their religious institution. Nobody can get anywhere because of the 
price.
  So I simply, as I draw to a close, want to be able to cite from the 
report language of this bill: ``With control of 40 percent of the 
world's production, OPEC has substantial influences over the price of 
oil. OPEC member nations have extensive oil reserves and therefore can 
readily increase supply and lower prices.'' That means the OPEC can act 
for the greater good if they desire to do so.
  I think that's simple enough to understand. They can increase supply, 
they can lower prices, but they're not doing it.
  So I would ask my colleagues from all parts of the country to be 
sympathetic to vacationers, people trying to get to hospitals, mothers 
and fathers taking children to various places, elderly trying to get to 
the places of worship, where they go. Just the sheer operation of 
America is dependent on what we do here today. I can't go home, and I 
imagine none of you can, without saying we tried to do something.
  I close simply by an oral letter to my constituents. You might think 
that you can ride this out, those of you who are the named and 
successful operators of our energy industry in the United States. We 
encourage you, you are American, you have jobs, you are the engine of 
the economy. We're not your enemy. We are your supporters, but we have 
to work for the consumers. Come out in the open. Encourage a roundtable 
of discussion. Let the CEOs of the major companies sit in a roundtable 
discussion and discuss with the American people why we have this 
increasing and burdensome cost of gasoline.
  Look closely at the legislation that is before us and recognize that 
it is a valuable piece of legislation that gives authority just for the 
thoughtful review of how we can do better.
  I ask my colleagues to support this particular legislation, H.R. 
2264, that, in fact, is an answer to this constant question, what are 
we going to do about gasoline prices? As Members of the United States 
Congress, it is imperative that we act. We have to do more. This is a 
thoughtful piece of legislation that frames the question whether or not 
a sovereign nation is protected against antitrust violations that 
impact negatively on the consumer in the United States of America. We 
have to do this, and we have to do more.
  I thank the gentleman from Detroit, from Michigan, the distinguished 
chairman of the Judiciary Committee, for yielding to this grounded 
representative of the energy industry in Houston, Texas, who wants to 
work collectively to get something done for the people of the United 
States.

[[Page 13500]]


  Mr. KELLER of Florida. Mr. Speaker, I reserve the balance of my time.
  Mr. CONYERS. How much time remains, Mr. Speaker?
  The SPEAKER pro tempore (Mr. Berman). The gentleman from Michigan has 
3\1/2\ minutes remaining.
  Mr. CONYERS. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman 
from New York (Mr. Bishop).
  Mr. BISHOP of New York. Mr. Speaker, I thank the chairman for 
yielding.
  I rise in support of H.R. 2264. As I drive around eastern Long 
Island, an area that is heavily dependent on its economic stability on 
travel and tourism, it is all too common to see gas prices as high as 
$3.30 a gallon. I'm reminded of how few influences beyond our shores 
affect our economic prosperity as much as the supply of oil.
  The disappointment we share after 6\1/2\ years of failed foreign and 
energy policies is matched by our frustration that price gouging by oil 
and gas companies, as well as collusion among foreign governments to 
restrict the flow of oil to the United States, continue unchecked.
  As Thomas Friedman has written in the New York Times, we can't have 
an effective, forward-looking foreign policy toward the Middle East 
without a serious energy policy to reduce our dependence on foreign 
oil. This bill, which empowers the U.S. to legally challenge foreign 
collusion resulting in price spikes, is a good first step towards that 
goal.
  One of the first resolutions I introduced called on the President to 
demand OPEC boost oil production, which was also included in the 
Democratic substitute I was proud to offer to the Energy Policy Act of 
2005. Despite a wave of record gas prices that summer, President Bush 
and the then-majority ignored that call.
  Consequently, the surging price of gas continues to hit middle-class 
families hard while we wait for the administration to produce a foreign 
and energy policy that finally shrinks our reliance on foreign oil and 
vulnerability to the whims of oil cartels.
  Mr. KELLER of Florida. Mr. Speaker, I'm prepared to close.
  Let me just say this. Gas prices are at a record high, and Hugo 
Chavez is laughing all the way to the bank. Coddling and jawboning 
leaders like Mr. Chavez of Venezuela has not worked. If you are serious 
about doing something about OPEC's price-fixing misbehavior, then 
please vote ``yes'' on NOPEC and allow us to bring antitrust lawsuits 
against these oil cartel members for collusion, price fixing and other 
anticompetitive activities that continue to gouge American consumers.
  Mr. Speaker, I urge my colleagues to vote ``yes'' on NOPEC.
  Mr. Speaker, I yield back the balance of my time.
  Mr. CONYERS. 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. TIAHRT. I strongly oppose oil-producing and exporting cartels 
setting artificial limits on the production of oil. Infamous cartels, 
such as the Organization of the Petroleum Exporting Countries, or OPEC, 
have manipulated the supply of oil and helped worldwide gasoline

[[Page 13501]]

prices soar. This harmful collaboration to limit oil production has led 
to hardships for the American economy.
  Unfortunately, Democratic leaders have brought a misguided bill to 
the House floor this week to supposedly bring an end to cartels such as 
OPEC. While I support the dismantling of cartels that manipulate oil 
production, I have serious concerns about negative consequences the 
United States would face if this bill were enacted.
  I rise to oppose H.R. 2264 because of the impact it would have on our 
national security, trade security and energy security.
  If the United States should bring an antitrust lawsuit against an 
OPEC member country, restrictions could be placed on our ability to 
station and activate troops in the Middle East. We rely on cooperation 
from countries that are members of cartels for assistance in the global 
war on terror. We should carefully consider what retaliatory actions or 
restrictions these countries could place on the United States if we 
were to pursue actions authorized in H.R. 2264.
  These foreign governments could also levy trade sanctions against 
American products and businesses or choose to employ another oil 
embargo like the one that occurred in 1973. By cutting off oil 
supplies, they could cause gasoline price increases for American 
consumers. Americans do not want higher gas prices, which is the 
direction H.R. 2264 could take us.
  The Democratic leadership should have waited until the Government 
Accountability Office is able to study the likelihood of retaliatory 
actions against the United States and any negative impact those actions 
would yield if H.R. 2264 became law. American security is not something 
we should treat glibly.
  I urge my colleagues to vote against H.R. 2264. The uncertain impact 
this bill could have on America's national security, energy security 
and economic security is not worth risking for hasty passage of a bill 
that will yield no short-term benefits for the American people.

  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Michigan (Mr. Conyers) that the House suspend the rules 
and pass the bill, H.R. 2264, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. CONYERS. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this question will 
be postponed.

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