[House Report 106-528]
[From the U.S. Government Publishing Office]





106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     106-528

=======================================================================



 
                    OIL PRICE REDUCTION ACT OF 2000

                                _______
                                

 March 17, 2000.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Gilman, from the Committee on International Relations, submitted 
                             the following

                              R E P O R T

                             together with

                           SUPPLEMENTAL VIEWS

                        [To accompany H.R. 3822]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on International Relations, to whom was 
referred the bill (H.R. 3822) to reduce, suspend, or terminate 
any assistance under the Foreign Assistance Act of 1961 and the 
Arms Export Control Act to each country determined by the 
President to be engaged in oil price fixing to the detriment of 
the United States economy, and for other purposes, having 
considered the same, reports favorably thereon with an 
amendment and recommends that the bill as amended do pass.
  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Oil Price Reduction Act of 2000''.

SEC. 2. FINDINGS.

  The Congress finds the following:
          (1) Oil producing countries, including the nations of the 
        Organization of Petroleum Exporting Countries (OPEC), took 
        concerted actions in March and September of 1999 to cut oil 
        production and hold back from the market 4,000,000 barrels a 
        day representing approximately six percent of the global 
        supply.
          (2) OPEC, in its capacity as an oil cartel, has been a 
        critical factor in driving prices from approximately $11 a 
        barrel in December 1998 to a high of $30 a barrel in mid-
        February 2000, levels not seen since the Persian Gulf Conflict.
          (3) On February 10, 2000, a hearing before the Committee on 
        International Relations of the House of Representatives on 
        ``OPEC and the Northeast Energy Crisis'' clearly demonstrated 
        that OPEC's goal of reducing its oil stocks was the major 
        reason behind price increases in heating oil, gasoline, and 
        diesel oil stocks.
          (4) During this hearing, the Assistant Secretary in the 
        Office of International Affairs of the Department of Energy 
        noted that artificial supply constraints placed on the market 
        are ultimately self-defeating in so far as they increase 
        volatility in the market, lead to boom and bust cycles, and 
        promote global instability, particularly in developing 
        countries whose economies are extremely vulnerable to sharp 
        price increases.
          (5) These price increases have caused inflationary shocks to 
        the United States economy and could threaten the global 
        economic recovery now underway in Europe and Asia where the 
        demand for oil is rising.
          (6) The transportation infrastructure of the United States is 
        under stress and tens of thousands of small- to medium-sized 
        trucking firms throughout the Northeast region are on the verge 
        of bankruptcy because of the rise in diesel oil prices to more 
        than $2 per gallon--a 43 percent increase in the Central 
        Atlantic region and a 55 percent increase in the New England 
        region--an increase that has had the effect of requiring these 
        trucking firms to use up to 20 percent of their operating 
        budgets for the purchase of diesel oil.
          (7) Many elderly and retired Americans on fixed incomes 
        throughout the Northeast region of the United States cannot 
        afford to pay the prevailing heating oil costs and all too 
        often are faced with the choice of paying the grocery bills or 
        staying warm.
          (8) Several key oil producing nations relied on the United 
        States military for their protection in 1990 and 1991, 
        including during the Persian Gulf Conflict, and these nations 
        still depend on the United States for their security.
          (9) Many of these nations enjoy a close economic and security 
        relationship with the United States which is a fundamental 
        underpinning of global security and cooperation.
          (10) A continuation of the present policies put in place at 
        the meeting of OPEC Ministers in March and September of 1999 
        threatens the relationship that many of the OPEC nations enjoy 
        with the United States.

SEC. 3. POLICY OF THE UNITED STATES.

  (a) Policy With Respect to Oil Exporting Countries.--It shall be the 
policy of the United States to consider the extent to which major net 
oil exporting countries engage in oil price fixing to be an important 
determinant in the overall political, economic, and security 
relationship between the United States and these countries.
  (b) Policy With Respect to Oil Importing Countries.--It shall be the 
policy of the United States to work multilaterally with other countries 
that are major net oil importers to bring about the complete 
dismantlement of international oil price fixing arrangements.

SEC. 4. REPORT TO CONGRESS.

  Not later than 30 days after the date of enactment of this Act, the 
President shall transmit to the Congress a report that contains the 
following:
          (1) A description of the overall economic and security 
        relationship between the United States and each country that is 
        a major net oil exporter, including each country that is a 
        member of OPEC.
          (2) A description of the effect that coordination among the 
        countries described in paragraph (1) with respect to oil 
        production and pricing has had on the United States economy and 
        global energy supplies.
          (3) Detailed information on any and all assistance programs 
        under the Foreign Assistance Act of 1961 and the Arms Export 
        Control Act, including licenses for the export of defense 
        articles and defense services under section 38 of such Act, 
        provided to the countries described in paragraph (1).
          (4) A determination made by the President in accordance with 
        section 5 for each country described in paragraph (1).

SEC. 5. DETERMINATION BY THE PRESIDENT OF MAJOR OIL EXPORTING COUNTRIES 
                    ENGAGED IN PRICE FIXING.

  The report submitted pursuant to section 4 shall include the 
determination of the President with respect to each country described 
in section 4(1) as to whether or not, as of the date on which the 
President makes the determination, that country is engaged in oil price 
fixing to the detriment of the United States economy.

SEC. 6. DIPLOMATIC EFFORTS TO END PRICE FIXING.

  (a) Diplomatic Efforts.--Not later than 30 days after the date on 
which the President transmits to the Congress the report pursuant to 
section 4, the President shall--
          (1) undertake a concerted diplomatic campaign to convince any 
        country determined by the President pursuant to section 5 to be 
        engaged in oil price fixing to the detriment of the United 
        States economy that the current oil price levels are 
        unsustainable and will negatively effect global economic growth 
        rates in oil consuming and developing countries; and
          (2) take the necessary steps to begin negotiations to achieve 
        multilateral action to reduce, suspend, or terminate bilateral 
        assistance and arms exports to major net oil exporters engaged 
        in oil price fixing as part of a concerted diplomatic campaign 
        with other major net oil importers to bring about the complete 
        dismantlement of international oil price fixing arrangements 
        described in such report.
  (b) Report on Diplomatic Efforts.--Not later than 120 days after the 
date of the enactment of this Act, the President shall transmit to the 
Congress a report describing any diplomatic efforts undertaken in 
accordance with subsection (a) and the results achieved by those 
efforts.
  (c) Authority To Reduce, Suspend, or Terminate Assistance.--Pursuant 
to the current authorities of the President and in furtherance of 
multilateral efforts, or bilateral efforts when the United States is 
the sole exporter of a particular defense article or defense service, 
the President is authorized, at any time after transmitting the report 
pursuant to section 4, to reduce, suspend, or terminate assistance 
under the Foreign Assistance Act of 1961 and the Arms Export Control 
Act, including the license for export of defense articles or defense 
services under section 38 of such Act, to any country determined by the 
President pursuant to section 5 to be engaged in oil price fixing to 
the detriment of the United States economy.

SEC. 7. DEFINITIONS.

  In this Act:
          (1) Oil price fixing.--The term ``oil price fixing'' means 
        participation in any agreement, arrangement, or understanding 
        with other countries that are oil exporters to increase the 
        price of oil or natural gas by means of, inter alia, limiting 
        oil or gas production or establishing minimum prices for oil or 
        gas.
          (2) OPEC.--The term ``OPEC'' means the Organization of 
        Petroleum Exporting Countries.

                         BACKGROUND AND PURPOSE

    In testimony before the International Relations Committee 
on February 10, 2000, the Assistant Secretary of the Office of 
International Affairs at the Department of Energy, Mr. David 
Goldwyn, noted that, ``* * * oil prices have more than doubled 
in the past year. Prices have increased from near historically 
low levels, around $11 in December 1998, to recent levels not 
seen since the Gulf crisis. This rise in price is largely 
attributed to the actions taken by the Organization of 
Petroleum Exporting Countries (OPEC) to restrict supplies to 
the market * * *. Beginning in March of 1998, OPEC instituted 
three tiers of production cuts, which eventually totaled 4.3 
million barrels per day. OPEC member compliance with the third 
cut, effective in April, 1999, has created an increasingly 
tight market as crude oil inventories have been drawn down over 
the course of the past year.''
    Mr. Goldwyn went on to say that the worldwide shortfall in 
crude oil last year averaged over one million barrels a day, an 
amount which most observers believe has now reached two million 
barrels a day. It is the view of the International Energy 
Agency that oil exporting nations must close this two million 
barrel a day gap in the very near future to prevent oil prices 
from rising any further next month.
    These successive waves of production cutbacks from OPEC 
nations and their oil exporting allies were not met with strong 
reaction from the administration at the time decisions were 
made. Since the heating oil crisis began to affect the 
Northeast, Secretary of Energy Bill Richardson has been very 
active in pursuing energy-related discussions with OPEC members 
to bring about a significant increase in production.
    It is hard to gauge whether OPEC member states in their 
upcoming meeting in Vienna on March 27 will increase production 
to make up the current global shortfall of two million barrels 
per day.
    As heating oil and gasoline prices have mounted, our 
consumers, elderly constituents, and businessmen across the 
Northeast and the entire country have struggled to make ends 
meet, as the administration attempts to formulate a strategy to 
address this mounting threat from OPEC nations.
    In the view of the Committee, the Oil Price Reduction Act, 
H.R. 3822, would force the administration to undertake some 
critical first steps in identifying the threats to our energy 
security from OPEC and non-OPEC producers alike and in 
developing options for dealing with them in a coherent and 
coordinated fashion.
    This bill contains a number of findings relating to the 
OPEC and its efforts to limit oil production and drive prices 
up from $11 a barrel to over $30 today. It notes that the price 
increases have caused inflationary shocks to the U.S. economy, 
have put our entire transportation infrastructure under stress, 
have harmed many Americans on fixed incomes and could threaten 
as well the global economic recovery now underway in Asia and 
Europe. It notes that a continuation of the present OPEC 
policies of withholding oil production from the market could 
undermine the relationship we have with the OPEC member states 
and other key net oil exporting countries.
    It states that it should be the policy of the United States 
to take into account the extent to which a major net oil 
exporting country engages in oil price fixing as an important 
determinant in our overall political, economic and security 
relationship. The bill also states that the U.S. should work 
multilaterally with other countries that are major net oil 
importers to bring about the dismantling of oil price fixing 
arrangements.
    Not later than 30 days after enactment, the President shall 
report on the overall relationship we have with each country 
that is a major oil exporter, shall describe the nature of the 
coordination between these countries in regard to the effect 
that oil pricing and production has had on the U.S. economy, 
and shall provide detailed information on any assistance 
programs under the Foreign Assistance Act, (FAA) or the Arms 
Export Control Act, (AECA) including licenses for the export of 
defense articles and services, provided to every one of these 
countries.
    The report would include a determination by the President 
on whether or not any country is engaged in oil price fixing to 
the detriment of the U.S. economy.
    The bill further stipulates that not later than 30 days 
after the President transmits this report to Congress he should 
(1) undertake a diplomatic campaign to convince those countries 
identified as engaged in price fixing that current oil price 
levels will have a negative impact on oil consuming and 
developing countries; and (2) take necessary steps to begin 
negotiations to achieve multilateral actions with other major 
net oil importers, including the suspension, termination or 
reduction of bilateral assistance or arms sales, with the goal 
of dismantling of oil price fixing arrangements. Not later than 
120 days after enactment, the President shall report to 
Congress describing the results and achievements of these 
diplomatic efforts.
    Finally, the bill specifies that in furtherance of these 
multilateral efforts, or bilateral efforts to the extent the 
U.S. is the sole exporter of a particular defense article or 
service, the President is authorized to reduce, suspend or 
terminate assistance under the FAA or arms sales under the AECA 
to any country determined to be engaged in oil price fixing.
    It is not the intention of the Committee that any provision 
of this bill should limit or in any way constrain the 
authorities and powers of the President in protecting the 
national economic security of the United States against the 
activities of OPEC, and its coordination of production levels 
among its member states and other major net oil exporting 
countries to set prices.
    The purpose of this legislation is to ensure that the 
President determines whether OPEC members or other major net 
oil exporters are engaged in price fixing to the detriment of 
the United States economy. If the President makes such 
determination for any country, then the President must 
undertake a concerted bilateral and multilateral diplomatic 
campaign to bring about the end of oil price fixing 
arrangements.
    In that regard, in testimony before the International 
Relations Committee, administration officials have stated 
clearly that OPEC has restricted supplies to the market driving 
up prices and that its activities as a cartel are not in the 
national interests of the United States.
    This bill also makes clear that any determination by the 
President that a country is involved in price fixing to the 
detriment of the U.S. economy should also lead to (1) a review 
of our relationship with those countries and (2) a 
comprehensive review of those options available to the 
President as part of the multilateral effort including the 
suspension, termination or reduction of assistance or arms 
sales to these same countries.
    Specifically, it is the intent of the Committee that the 
administration provides complete and accurate information about 
the price-fixing activities of all major net oil exporting 
nations, including those OPEC member states and non-OPEC 
members which have held production off the world market with 
the aim of driving up prices to the detriment of the U.S. 
economy. By all accounts, the U.S. economy has been harmed by 
the rapid rise of prices from $11 a barrel in early 1999 to 
over $32 a barrel in mid-March.
    High energy prices helped push the U.S. Labor Department's 
producer price index up 1 percent in February as prices paid to 
our nation's producers posted the biggest increase since the 
Iraqi invasion of Kuwait in October of 1990. Other key prices, 
including those for autos and computers actually fell 
indicating that inflationary pressures are largely oil-related.
    The Center for Global Energy Studies has estimated that $30 
a barrel oil cuts the U.S. growth rate by nearly 1 percent. But 
millions of Americans driving to and from work found that the 
dramatic rise in gasoline prices--up 12 cents in the past two 
weeks alone--is beginning to cut into their disposable income. 
For thousands of American trucking firms the dramatic rise in 
diesel oil prices has already driven up their operating costs 
forcing many into bankruptcy.

                            COMMITTEE ACTION

    H.R. 3822 was introduced by Representative Gilman on March 
2, 2000. The bill was referred to the Committee on 
International Relations.
    The Committee has held two hearings on the issue of oil 
price fixing since the beginning of 2000. On February 10, 2000, 
the Committee took testimony from the Assistant Secretary for 
International Affairs of the Department of Energy, from a 
Deputy Assistant Secretary of State for Economic Affairs in the 
Department of State, and from private witnesses. On March 1 the 
Committee took testimony from the Secretary of the Department 
of Energy, the Honorable Bill Richardson.
    The Committee on International Relations marked up the bill 
in open session, pursuant to notice, on March 15, 2000. During 
its consideration, the Committee agreed to an amendment in the 
nature of a substitute offered by Mr. Gilman. Prior to the 
final vote on the amendment in the nature of a substitute, an 
amendment was offered by Mr. Gejdenson to the pending 
amendment. The Gejdenson amendment replaced certain language 
relating to Presidential authority to reduce, suspend, or 
terminate assistance. The Gejdenson amendment provided, in 
essence, that the only bilateral efforts to reduce, suspend, or 
terminate assistance under the Foreign Assistance Act or Arms 
Export Control Act shall be with respect to a particular 
defense article or service if the United States is the sole 
exporter of such an article or service. The Gejdenson amendment 
was agreed to by a record vote of 21 to 15.
    Subsequently, the Committee agreed to a motion offered by 
Mr. Bereuter to favorably report the bill, as amended, to the 
House of Representatives, by voice vote, a quorum being 
present.

Record votes on amendments and motion to report

    Clause (3)(b) of rule XIII of the Rules of the House of 
Representatives requires that the results of each record vote 
on an amendment or motion to report, together with the names of 
those voting for or against, be printed in the committee 
report. The following record vote was taken during 
consideration of H.R. 3822:

Description of amendment, motion, order, or other proposition (votes 
        during markup of H.R. 3822--March 15, 2000)

    Vote No. 1.-- Gejdenson amendment to the Gilman substitute 
amendment.
    Voting yes: Manzullo, Houghton, Campbell, Gejdenson, 
Berman, Ackerman, Faleomavaega, Payne, Menendez, Brown, 
Hastings, Danner, Hilliard, Sherman, Wexler, Rothman, Davis, 
Pomeroy, Delahunt, Meeks and Lee.
    Voting no: Gilman, Goodling, Bereuter, Smith, Gallegly, 
Ros-Lehtinen, Ballenger, Rohrabacher, Royce, King, Chabot, 
McHugh, Brady, Cooksey and Tancredo.
    Ayes, 21. Noes, 15.

                             OTHER MATTERS

Committee oversight findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee reports the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

Committee on Government Reform findings

    Clause 3(c)(4) of rule XIII of the Rules of the House of 
Representatives requires each committee report to contain a 
summary of the oversight findings and recommendations made by 
the Government Reform Committee pursuant to clause (4)(c)(2) of 
rule X of those Rules. The Committee on International Relations 
has received no such findings or recommendations from the 
Committee on Government Reform.

Advisory Committee statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

Applicability to the legislative branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

Constitutional authority statement

    In compliance with clause 3(d)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee cites the 
following specific powers granted to the Congress in the 
Constitution as authority for enactment of H.R. 3822 as 
reported by the Committee: Article I, section 8, clause 1 
(relating to providing for the common defense and general 
welfare of the United States); Article I, section 8, clause 3 
(relating to the regulation of commerce with foreign nations); 
and Article I, section 8, clause 18 (relating to making all 
laws necessary and proper for carrying into execution powers 
vested by the Constitution in the Government of the United 
States or in any Department or Officer thereof).

Preemption clarification

    Section 423 of the Congressional Budget Act of 1974 
requires the report of any committee on a bill or joint 
resolution to include a committee statement on the extent to 
which the bill or joint resolution is intended to preempt state 
or local law. The Committee states that H.R. 3822 is not 
intended to preempt any state or local law.

New budget authority and tax expenditures, Congressional Budget Office 
        cost estimate, and Federal mandates statements

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives requires each committee report that accompanies 
a measure providing new budget authority, new spending 
authority, or new credit authority or changing revenues or tax 
expenditures to contain a cost estimate, as required by section 
308(a)(1) of the Congressional Budget Act of 1974, as amended, 
and, when practicable with respect to estimates of new budget 
authority, a comparison of the estimated funding level for the 
relevant program (or programs) to the appropriate levels under 
current law.
    Clause 3(d) of rule XIII of the Rules of the House of 
Representatives requires committees to include their own cost 
estimates in certain committee reports, which include, when 
practicable, a comparison of the total estimated funding level 
for the relevant program (or programs) with the appropriate 
levels under current law.
    Clause 3(c)(3) of rule XIII of the Rules of the House of 
Representatives requires the report of any committee on a 
measure which has been approved by the Committee to include a 
cost estimate prepared by the Director of the Congressional 
Budget Office, pursuant to section 403 of the Congressional 
Budget Act of 1974, if the cost estimate is timely submitted.
    Section 423 of the Congressional Budget Act requires the 
report of any committee on a bill or joint resolution that 
includes any Federal mandate to include specific information 
about such mandates. The Committee states that H.R. 3822 does 
not include any Federal mandate.
    The Committee adopts the cost estimate of the Congressional 
Budget Office as its own submission of any new required 
information with respect to H.R. 3822 on new budget authority, 
new spending authority, new credit authority, or an increase or 
decrease in the national debt. It also adopts the estimate of 
Federal mandates prepared by the Director of the Congressional 
Budget Office pursuant to section 423 of the Unfunded Mandates 
Reform Act. The estimate and report which has been received is 
set out below.

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 17, 2000.
Hon. Benjamin A. Gilman,
Chairman, Committee on International Relations,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3822, the Oil 
Price Reduction Act of 2000.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sunita 
D'Monte.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 3822--Oil Price Reduction Act of 2000

    H.R. 3822 would require the President to report to Congress 
on the economic and security relationships between the United 
States and major oil exporting countries (including members of 
the Organization of Petroleum Exporting Countries) and whether 
those countries have engaged in price fixing that has harmed 
the U.S. economy. The bill would authorize the President to 
reduce, suspend, or terminate foreign assistance to any country 
that engages in price fixing that has harmed the U.S. economy 
and would require him to make diplomatic efforts to end the 
price fixing.
    CBO estimates that H.R. 3822 would have insignificant costs 
resulting from the reporting requirements and possible increase 
in diplomatic activity. The authorization to terminate, 
suspend, or reduce U.S. foreign assistance to specific 
countries would have no budgetary impact because the President 
has that authority under current law. Because H.R. 3822 would 
not affect direct spending or receipts, pay-as-you-go 
procedures would not apply.
    H.R. 3822 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, and tribal 
governments.
    The estimate was prepared by Sunita D'Monte. This estimate 
was approved by Peter H. Fontaine, Deputy Assistant Director 
for Budget Analysis.

                      Section-by-Section Analysis

Section 1. Short title

    The bill may be cited as the ``Oil Price Reduction Act''.

Section 2. Findings

    This bill contains a number of findings relating to the 
Organization of Petroleum Exporting Countries and its efforts 
to limit oil production and drive prices up from $11 a barrel 
to over $30 today. It notes that the price increases have 
caused inflationary shocks to the U.S. economy, have put our 
entire transportation infrastructure under stress, have harmed 
many Americans on fixed incomes and could threaten as well the 
global economic recovery now underway in Asia and Europe.
    It notes that several key oil producing nations relied on 
the U.S. military for their protection in 1990 and 1991 and 
that these nations still depend on the U.S. for their security. 
Finally, it finds that a continuation of the present OPEC 
policies of withholding oil production from the market could 
undermine the relationship we have with the OPEC member states 
and other key net oil exporting countries.

Section 3. Policy of the United States

    It states that it should be the policy of the United States 
to take into account the extent to which a major net oil 
exporting country engages in oil price fixing as an important 
determinant in our overall political, economic and security 
relationship. The bill also states that the U.S. should work 
multilaterally with other countries that are major net oil 
importers to bring about the dismantling of oil price fixing 
arrangements.

Section 4. Report to Congress

    Not later than 30 days after enactment, the President shall 
report on the overall relationship we have with each country 
that is a major oil exporter, shall describe the nature of the 
coordination between these countries in regard to the effect 
that oil pricing and production has had on the U.S. economy, 
and shall provide detailed information on any assistance 
programs under the Foreign Assistance Act, FAA, or the Arms 
Export Control Act, AECA, including licenses for the export of 
defense articles and services, provided to every one of these 
countries.

Section 5. Determination by the President on major oil exporting 
        countries engaged in price fixing

    The report would include a determination by the President 
on whether or not any country described in Section 4 is engaged 
in oil price fixing to the detriment of the U.S. economy.

Section 6. Diplomatic efforts to end price fixing

    The bill further stipulates that not later than 30 days 
after the President transmits this report to Congress he should 
(1) undertake a diplomatic campaign to convince those countries 
identified as engaged in price fixing that current oil price 
levels will have a negative impact on oil consuming and 
developing countries and (2) take multilateral actions with 
other major net oil importers, including the suspension, 
termination or reduction of bilateral assistance or arms sales, 
with the goal of dismantling of oil price fixing arrangements.
    Not later than 120 days after enactment, the President 
shall report to Congress describing the results and 
achievements of these diplomatic efforts.
    Finally, the bill specifies that in furtherance of these 
multilateral efforts or bilateral efforts when the U.S. is the 
sole exporter of a particular defense article or service, the 
President is authorized to reduce, suspend or terminate 
assistance under the FAA or arms sales under the AECA to any 
country determined to be engaged in oil price fixing.

Section 7. Definitions

    The bill defines ``oil price fixing'' as participation in 
any agreement with other oil exporting countries to increase 
the price of oil by limiting production or establishing minimum 
price levels. It defines OPEC as the Organization of Petroleum 
Exporting Countries.

                           SUPPLEMENTAL VIEWS

    I voted to move the ``Oil Price Reduction Act of 2000'' 
from the International Relations Committee to the floor of the 
House of Representatives for the purpose of giving the 
President the authority to restrict or stop foreign aid from 
the United States to countries involved in fixing the 
production limits of oil.
    The Organization of Petroleum Exporting Countries (OPEC), 
which includes Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, 
Nigeria, Qatar, Saudi Arabia, United Arab Emirates, and 
Venezuela, and the other major oil producing nations of Mexico, 
Norway, Oman, and Russia all agreed to restrict the production 
of oil, resulting in a marked increase in fuel prices. 
According to a memo prepared for the committee from the 
Congressional Research Service (CRS), countries receiving 
direct U.S. foreign aid include Algeria, Indonesia, Nigeria, 
Venezuela, Mexico, Oman, and Russia.
    This conspiracy has caused multiple problems in our 
country. First, it will cost farmers paying sky high prices for 
diesel fuel more to put in and harvest their crops at a time 
when the price of crops is at an all time low. Second, it hurts 
consumers because the high cost of fuel increases the cost of 
transportation of food and consumer items. Third, it hurts all 
Americans because the inflationary spiral of increased fuel 
costs may spur the Federal Reserve to increase interest rates.
    Additionally, in the case of Kuwait and Saudi Arabia, the 
United States, a little less than a decade ago, helped ensure 
their sovereignty during the Persian Gulf War. Have they 
forgotten the sacrifice of our fighting men and women?
    But in supporting this bill, I wanted to express my point 
of view that I do not believe our export promotion programs 
should be included in the definition of ``foreign aid'' in this 
legislation. Technically, the Overseas Private Investment 
Corporation (OPIC) and the Trade Development Agency (TDA) are 
authorized by Congress under the overall statutory framework of 
the Foreign Assistance Act of 1961. Thus, they are lumped in 
with other foreign aid programs.
    As the prime author of the Export Enhancement Act of 1999, 
which reauthorized OPIC and TDA and was signed into law by the 
President last year (P.L. 106-158), I know that these programs 
are not give-aways to foreign governments. In fact, they are 
two of the many critically important tools that helps U.S. 
workers win export opportunities which otherwise would have 
gone to foreign competitors.
    For 29 years, OPIC has been the U.S. government agency 
providing political risk insurance and financing or projects 
that help America compete abroad and promote stability and 
development in strategic countries and economies around the 
world. OPIC's political risk insurance covers three main 
areas--expropriation (loss of an investment due to 
nationalization or confiscation by a foreign government); 
currency inconvertibility (inability to remit profits from 
local currency to US dollars); and political violence (loss of 
assets or income due to war, revolution or politically-
motivated civil strife, terrorism or sabotage). Since 1971, 
OPIC supported projects have generated $61 billion in U.S. 
exports and created more than 242,000 American jobs. And, 
unlike other foreign aid programs, OPIC operates totally on a 
user-fee self-sustaining basis by charging U.S. companies for 
their services, which results in no cost to the taxpayer. OPIC 
brought in $144 million in revenue to the U.S. Treasury last 
year and they expect a $220 million surplus this year. And, 
OPIC has $3.7 billion in reserves.
    Last year, OPIC had nine projects worth $601.7 million in 
three countries (Indonesia, Venezuela, and Russia) potentially 
targeted by H.R. 3822. Foreign competitors may have won these 
projects if it wasn't for OPIC. By reducing, suspending, or 
terminating OPIC's operations in these targeted countries to 
show our disgust with OPEC's price fixing scheme will only 
boomerang on future U.S. export opportunities to these 
countries.
    TDA develops feasibility studies designing in American 
specifications so that U.S. exporters can win major 
infrastructure projects in developing countries and emerging 
economies later down the road. This 43 person agency has 
generated $16 billion in exports since its inception in 1981. 
Every $1 in spending for TDA projects has led to the export of 
$37 in U.S. goods and services overseas. In the law that I 
authored, the Export Enhancement Act requires, to the maximum 
extent possible, the imposition of ``success fees'' on 
companies that win export deals thanks to the groundwork laid 
by a feasibility study conducted by the TDA. Thus, more and 
more companies will pay to use these services. This is 
certainly not an ``aid'' program.
    Since the early 1990's TDA has been involved in 284 
projects (funding feasibility studies, organizing visits to the 
United States, match-making conferences, etc.) worth $81.6 
million in eight nations potentially covered by H.R. 3822 
(Algeria, Nigeria, Oman, Saudi Arabia, Indonesia, Russia, 
Mexico, and Venezuela). Using TDA's calculus, the impact of 
these efforts will result in $3 billion of U.S. exports to 
these countries. It makes no sense, then, to cut off our 
exports by halting TDA programs in these countries to protest 
OPEC's behavior.
    In my opinion, OPIC and TDA are not ``foreign aid'' 
programs. U.S. companies pay to use these services. They are 
primarily a tool to help U.S. exporters win sales that would 
have otherwise gone to our foreign competitors. Thus, as the 
Executive Branch tries to discern the will of Congress on this 
issue, I want to make it clear from my perspective that OPIC 
and TDA should be excluded from the definition of foreign 
assistance under the Foreign Assistance Act of 1961. These 
programs simply help Americans by increasing exports and job 
growth in this country.

                                                Donald A. Manzullo.

                                

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