No Oil Producing and Exporting Cartels Act of 2007

Floor Speech

NO OIL PRODUCING AND EXPORTING CARTELS ACT OF 2007 -- (House of Representatives - May 22, 2007)

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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.

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