Washington, D.C. – Today, House Judiciary Committee Chairman Jerrold Nadler (D-NY) delivered the following opening remarks, as prepared, during the markup of H.R. 2393, No Oil Producing and Exporting Cartels (NOPEC) Act of 2021:
“The Organization of Petroleum Exporting Countries, or OPEC, is an international cartel whose members deliberately collude to limit crude oil production as a means of fixing prices, unfairly driving up the price of crude oil to satisfy the greed of oil producers. Such behavior, if done by private companies, would be illegal per se under U.S. antitrust law. Because of a series of court decisions, however, our nation’s antitrust enforcers are unable to protect American consumers and businesses from the direct harm caused by OPEC’s blatantly anti-competitive conduct.
“H.R. 2393, the ‘No Oil Producing and Exporting Cartels Act,’ or NOPEC, addresses these decisions by expressly authorizing the Justice Department to pursue antitrust enforcement actions against OPEC members, should it choose to do so, and by ensuring that American courts have jurisdiction to hear such cases.
“I am pleased to join my colleague, Congressman Chabot, as an original cosponsor of this legislation along with Antitrust Subcommittee Chairman Cicilline.
“NOPEC would amend the Sherman Antitrust Act to add a new section that explicitly makes it illegal for any foreign state to act collectively with others to limit production, fix prices, or otherwise restrain trade with respect to oil, natural gas, or other petroleum products. This provision could be enforced only by the Justice Department.
“The bill also creates an exemption under the Foreign Sovereign Immunities Act to allow litigation against foreign countries to the extent that they are engaged in price-fixing and other anti-competitive activities in violation of this new section.
“Finally, this legislation clarifies that the ‘act of state’ doctrine, which generally disfavors judicial review of certain actions by foreign governments, does not prevent courts from deciding antitrust cases brought against foreign governments under this Act.
“NOPEC strikes an appropriate balance between allowing aggressive enforcement of U.S. antitrust law against OPEC, to keep oil prices in check, and respecting the separation of powers, by deferring to the Executive Branch whether litigation is appropriate in any given case, in light of foreign policy and national security concerns.
“OPEC controls about 80 percent of global oil reserves, 40 percent of the world’s oil production, and more than 60 percent of the petroleum that is traded internationally. When acting collectively, OPEC countries can greatly influence crude oil prices.
“This effort to increase crude oil prices directly impacts American consumers because the price of crude oil is the largest single determinant of retail gas prices. According to one estimate, crude oil prices accounted for 56% of the cost of retail gasoline as recently as February 2021.
“And the retail price of gasoline touches almost every aspect of Americans’ daily lives—from the cost of commuting to the price of food, and almost every consumer good to the extent that such prices reflect transportation expenses.
“High gas prices, in addition to raising these costs and cutting into Americans’ income, can also cause a vicious cycle of negative economic effects. For example, when higher prices cause consumers to cut back on purchases and limit their travel, businesses lose revenue, and they may be forced to lay off employees, or to limit their employees’ salaries. This, in turn, unleashes another loop of negative economic effects, as those employees have less money in their pockets to spend.
“I support NOPEC because it would provide the federal government with an important tool to address unfair retail gas prices. This legislation was unanimously reported out of the Committee last Congress, and I look forward to its passage again this Congress. I thank Mr. Chabot for introducing this bipartisan legislation and I urge my colleagues to support the bill.
“I yield back the balance of my time.”
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