WASHINGTON – As oil prices continue to skyrocket, Senate
Judiciary Committee Ranking Member Chuck Grassley (R-Iowa) is calling on
President Biden to support his bipartisan No Oil Producing and Exporting Cartels
(NOPEC) Act. In a letter today to President Biden, Grassley
urged the administration to support the bill to hold the foreign oil producing
cartel accountable for its anticompetitive behavior that elevates global oil
prices.
In the letter, Grassley notes that since Biden’s
energy policies have discouraged domestic production, the President has
resorted to pleading with the Organization of Petroleum Exporting Countries
(OPEC) and its partners to ramp up production, only to be turned down. Biden
acknowledged in a 2000 letter to President Clinton that anticompetitive
behavior from OPEC harms American consumers, and called on the Clinton to
consider legal actions against OPEC. Now
that Biden is president, Grassley is calling on him to take the action that he
implored Clinton to take by backing NOPEC.
“The solution you advocated for in your 2000 letter
and the solution today is the same: enacting NOPEC. NOPEC would
provide the Department of Justice with an effective tool to ensure U.S.
consumers are no longer beholden to artificially inflated gas prices,” Grassley
wrote.
“While in the Senate, you were a cosponsor in 2006
of similar legislation. As President
today, you have the power to take action on an issue crucially important to the
American people that you supported during the Clinton and Bush Administrations.
You and your administration’s support of NOPEC
would help to enact this bill into law and ensure a fair and competitive
marketplace,” the letter continued.
NOPEC has enjoyed broad bipartisan
support for years, and advanced out of the Democrat-controlled House Judiciary
Committee with unanimous support in April. Grassley
recently
pressed Attorney General Merrick Garland to weigh in on the merits of
NOPEC to help curb the ballooning price
of oil
.
November 18, 2021
The
Honorable Joseph R. Biden
President
of the United States
1600
Pennsylvania Ave., NW
Washington,
D.C. 20500
Dear President
Biden,
I write
to ask you and your administration to support S. 977, the No Oil Producing and Exporting
Cartels Act, or NOPEC.
In a November
17, 2021 letter to FTC, you raised concerns about “mounting evidence of
anti-consumer behavior by oil and gas companies,” stating, “I do not accept
hard-working Americans paying more for gas because of anti-competitive or
otherwise potentially illegal conduct.”
[1]
Unfortunately,
every initiative your administration has taken since you have been sworn in as
President has been to undermine the United States’ ability to lower gas prices
for American consumers. You have not encouraged more American drilling and
exploration. Instead, you have attempted to destroy these good paying America
jobs and make us more reliant on oil from Russia and the Middle East. You blocked
construction of the Keystone XL Pipeline, placed a permanent hold on any new
Alaskan oil production, and halted any new exploration and development in the
rest of the country. Indeed, in January, Goldman Sachs forecasted an increase
in oil prices fueled by restrictions on domestic production and your policies
that discourage investment in domestic energy exploration.
[2]
As gas
prices increased, you have not revisited these disastrous decisions. Instead, you
have turned to pleading with the Organization of Petroleum Exporting Countries
(OPEC) and its partners to increase production to combat rising gas prices.
OPEC has flat out denied that request.
[3]
On
November 23, following rejections from OPEC and its partners, your
administration announced it would be releasing 50 million barrels of oil from
the Strategic Oil Reserve in an effort to combat rising gas prices. This is a
mere drop in the bucket and will do nothing to effectively address rising gas
prices or longstanding concerns in the oil markets.
The price at the pump is already the highest it’s been in 7 years, greatly
impacting American consumers at the same time that inflation makes their money
worth less. Driving high gas prices is the cost of crude oil. Oil prices have
doubled since the election last November, with oil trading above $80 per barrel
this year for the first time since 2014.
[4]
On the
other hand, when oil prices were high in 2000, you pressed President Clinton to
take action against OPEC.
[5]
In the letter you argued that OPEC should be sued in federal court for
violation of the United States antitrust laws. Your letter concluded “The
behavior of OPEC and other oil-producing nations in restraint of trade violates
U.S. antitrust law and basic international norms, and it is injuring the United
States and its citizens in a very real way. Consideration of such legal action
could provide an inducement to OPEC and other oil-producing countries to raise
production to head off such litigation.”
The solution
you advocated for in your 2000 letter and the solution today is the same:
enacting NOPEC. NOPEC would provide the Department of Justice with an effective
tool to ensure U.S. consumers are no longer beholden to artificially inflated
gas prices. This legislation would authorize the Department of Justice to sue
oil producing cartel members for antitrust violations. It would clarify that sovereign
immunity and “Act of State” doctrines cannot stop a court from hearing a case.
Importantly, NOPEC only gives the Department of Justice the ability to sue,
ensuring that the Administration is able to weigh possible foreign policy or
national security concerns when determining whether to bring a case.
OPEC
controls approximately 82% of proven oil reserves. When you include OPEC+,
which includes 10 non-OPEC members who coordinate with OPEC, they control 90%
of proven oil reserves.
[6]
OPEC states on its own website that its mission is to “coordinate and unify the
petroleum policies of its Member Countries and ensure the stabilization of oil
markets…”
[7]
This is the definition of anticompetitive conduct and collusion, and the
Department of Justice should have the tools available to combat these practices
that harm Americans at the pump.
NOPEC
has been introduced for the past several Congresses and has enjoyed
overwhelming bipartisan and bicameral support. In this Congress, on April 20,
2021, the House Judiciary Committee unanimously passed the bill by a voice
vote. While in the Senate, you were a cosponsor in 2006 of similar legislation.
[8]
As President today, you have the power to take action on an issue crucially
important to the American people that you supported during the Clinton and Bush
Administrations. Your and your administration’s support of NOPEC would help to
enact this bill into law and ensure a fair and competitive marketplace.
Thank
you for your consideration to this issue, I look forward to your response.
Sincerely,
Charles
E. Grassley
Ranking
Member
U.S. Senate
Committee on the Judiciary
-30-
[1] Andrew
Restuccia, Katy S. Ferek & Christopher
M. Matthews,
Biden Asks FTC to Examine
Oil, Gas Companies’ Role in High Gasoline Prices,
Wall St. J. (Nov. 17, 2021), https://www.wsj.com/articles/biden-asks-ftc-to-examine-whether-oil-gas-companies-are-illegally-keeping-gas-prices-high-11637164142.
[2] Ethan
Wolff-Mann,
Biden policy means higher oil
prices: Goldman,
Yahoo! News
(Jan. 22, 2021), https://www.yahoo.com/now/biden-policy-means-higher-oil-prices-goldman-170738261.html.
[3] Summer
Said & Benoit Faucon,
OPEC, Russia
Stick to Gradual Oil Production Boost,
Wall
St. J. (Nov. 4, 2021), https://www.wsj.com/articles/opec-russia-stick-to-oil-production-boost-11636037023.
[4] Caroline
Downey,
U.S. Oil Prices Continue to
Surge, Breaking Seven-Year Record,
Yahoo!
News (Oct. 11, 2021), https://news.yahoo.com/u-oil-prices-continue-surge-193337716.html.
[5] 146
Cong. Rec. 4095-97 (2000).
[6] Nick
Lioudis,
OPEC’s Influence on Global Oil
Prices,
Investopedia (Sep. 9,
2021
), https://www.investopedia.com/ask/answers/060415/how-much-influence-does-opec-have-global-price-oil.asp#citation-5.
[7] Our Mission,
Org. Petrol. Exp. Countries,
https://www.opec.org/opec_web/en/about_us/23.htm (last visited
Oct. 22, 2021).
[8] No
Oil Producing and Exporting Cartels Act, S. 2557, 109th Cong. (2006).