Dewine Sponsored Bill to Improve Competition in Oil Industry Passes Committee

DEWINE SPONSORED BILL TO IMPROVE COMPETITION IN OIL INDUSTRY PASSES COMMITTEE

Today the Senate Judiciary Committee approved the Oil and Gas Industry Antitrust Act of 2006 (S.2557), a bill cosponsored by U.S. Senator Mike DeWine (R-OH), that seeks to promote competition in the oil and gas industries in order to reduce fuel costs. The bill instructs the Department of Justice (DOJ), the Federal Trade Commission (FTC), and the Government Accountability Office (GAO) to examine how effective antitrust laws have been in the past and consider whether changes in antitrust laws regarding oil industry mergers are needed to promote competition. The bill also includes a provision similar to Senator DeWine's NOPEC legislation that clarifies that the U.S. government may prosecute OPEC nations for price-fixing in the oil and gas industry. The bill was approved by voice vote.

"This bill would make it crystal clear that the government can prosecute OPEC nations and hold them accountable for fixing prices and increasing the costs of fuel for American consumers," said Senator Mike DeWine, chairman of the Antitrust and Consumer Rights Subcommittee.

The bill incorporates a provision similar to Senator DeWine and Senator Herb Kohl's (D-WI) NOPEC bill that makes it clear that OPEC nations doing business in the U.S. must abide by U.S. antitrust laws. This provision clarifies that OPEC's activities are not protected by sovereign immunity and that the federal courts should not decline to hear a price-fixing case against OPEC based on the "act of state doctrine." This would force OPEC nations to begin pricing in a competitive, free market manner or face the possibility of being prosecuted for civil or criminal antitrust violations.

In addition to its provision about OPEC activities, the bill requires the DOJ and the FTC to study whether the antitrust laws need to be modified to provide special rules for the oil industry. It also requires the GAO to study whether divestitures required by FTC and DOJ during prior investigations have been effective at preserving competition. The FTC and DOJ will then use this study to reevaluate past mergers and decide if further action needs to be taken to preserve oil industry competition.

The bill would also make it unlawful for companies to unfairly withhold or divert supplies of gasoline or natural gas from local markets. It creates a Joint Federal and State Task Force to investigate information sharing practices among oil companies to see if these practices have been used to foster anti-competitive activity.

The bill is sponsored by Senator Arlen Specter (R-PA) and is also cosponsored by Senator Kohl, Senator Richard Durbin (D-IL), Senator Patrick Leahy (D-VT), Senator Diane Feinstein (D-CA), Senator Joseph Biden (D-DE), Senator Joseph Lieberman (D-CT) and Senator Russell Feingold (D-WI).

The bill now goes to the full Senate for consideration.

http://dewine.senate.gov/