House passes bill to sue OPEC over oil prices

[Guest GUTTERbOY]

http://www.reuters.com/article/topNews/idUSWAT00953020080520?feedType=RSS&feedName=topNews&rpc=22&sp=true

WASHINGTON (Reuters) - The House of Representatives overwhelmingly approved legislation on Tuesday allowing the Justice Department to sue OPEC members for limiting oil supplies and working together to set crude prices, but the White House threatened to veto the measure.

The bill would subject OPEC oil producers, including Saudi Arabia, Iran and Venezuela, to the same antitrust laws that U.S. companies must follow.

The measure passed in a 324-84 vote, a big enough margin to override a presidential veto.

The legislation also creates a Justice Department task force to aggressively investigate gasoline price gouging and energy market manipulation.

"This bill guarantees that oil prices will reflect supply and demand economic rules, instead of wildly speculative and perhaps illegal activities," said Democratic Rep. Steve Kagen of Wisconsin, who sponsored the legislation.

The lawmaker said Americans "are at the mercy" of OPEC for how much they pay for gasoline, which this week hit a record average of $3.79 a gallon.

The White House opposes the bill, saying that targeting OPEC investment in the United States as a source for damage awards "would likely spur retaliatory action against American interests in those countries and lead to a reduction in oil available to U.S. refiners."

The administration said less oil going to refineries would limit available gasoline supplies and raise fuel prices.

Foreign investment in U.S. oil infrastructure has declined in the last decade. But the state-owned oil companies of several OPEC nations are owners of U.S. refineries, and those investments could be affected if the legislation becomes law, said Arlington, Virginia-based FBR Capital Markets Corp.

The bill also requires the Government Accountability Office to carryout a study on the effects of prior oil company mergers on energy prices.

The Senate would still have to approve the House measure.

The Senate previously approved similar legislation as part of a broad energy bill. However, the OPEC-suing provision was removed after White House opposition in order to get the underlying energy legislation signed into law.

I'm no legal expert, so maybe someone can educate me as to how we're going to successfully sue a foreign country for violating American market principles. I have no love in my heart for OPEC, but I just don't see how this is going to do any good whatsoever.

[TripleDigitRide]

We're not. This will get the big V-E-T-O!

Edited May 21, 2008 by TripleDigitRide

[Smith]

This is a great idea! It can't fail! This is about as bad as Arlen Spector crying foul over "Spygate".

[Guest darkstar]

No fan of OPEC either but if some foreign conglomerate was threatning to sue America for something, we (Americans) would be telling them where to get off. I certainly don't want some other country telling us what we can or can't do. Didn't we go to war over 200 years ago because some country was telling us what to do?

[Guest Boomhower]

The administration said less oil going to refineries would limit available gasoline supplies and raise fuel prices.

Uhhhhh......Hello administration......look around......to few a current refineries = a raise in fuel prices.

[DWARREN123]

The IDIOTS strike again!

[Marswolf]

Just when I think Congress has acted as stupidly as they possibly could, they come up with something like this.

Maybe these oil producing countries will just decide to not deal with the US at all. Would you want to business with someone bring frivolous lawsuits against you?

[Guest Brian@GunDepot]

Just when I think Congress has acted as stupidly as they possibly could, they come up with something like this.

Maybe these oil producing countries will just decide to not deal with the US at all. Would you want to business with someone bring frivolous lawsuits against you?

I'm all for supply/demand and capitalism, but the oil prices are ridiculous and there needs to be something done about it.

Although suing another country under our law system isn't going to work, I do think we should stop the export of corn and grain; or at least dwindle it down to where they have to eat sand with their bread to get a full stomach. You know, fair trade... we want oil, you want to eat...

[HanSolo]

The biggest problem is not the Arabs. It is actually Exxon, BP, and Shell. If the problem was only the Arabs, then why are these three companies shattering profitability records every quarter.

[poak]

The biggest problem is not the Arabs. It is actually Exxon, BP, and Shell. If the problem was only the Arabs, then why are these three companies shattering profitability records every quarter.

The problem is caused my more than one entity.

Exxon, BP, and Shell are one, the EPA is another, and of course OPEC.

[HanSolo]

the Elegant Pathetic A$$holes are the root of a lot of evils here in America.

I love how twice in the past the Feds offered to pay for the proper structure that would have avoided the New Orleans disaster after Katrina, which the EPA blocked both times, then they turn and blame Bush for the disaster.

I do not disagree the OPEC is a problem, but they are a problem we can not really do anything about short of another war, but the others, we can do something about if we really wanted to.

[Guest GT_Rat]

Since, with the exception of Venezuela/Citgo, those countries oil producers aren't doing business in the US (i.e. we go to them to get the oil, they don't bring it to us and ask us to buy it). Any laws we made here would not be applicable to them. Wasted effort.

[Guest Hyaloid]

The biggest problem is not the Arabs. It is actually Exxon, BP, and Shell. If the problem was only the Arabs, then why are these three companies shattering profitability records every quarter.

Do you know the difference between a profit and a profit margin?

Look at the VOLUME of business they do... don't get moon-eyed about the size of the numbers.

--the following is not directed to any one in particular--

And, since when do we as Americans have the 'right' to cheap gas? They are in business to make money. The government should have no authority to seize 'windfall' profits from them, no more than they should be able to seize them from me.

I know the truckers are pissed off about the cost of fuel. I know it is becoming expensive. But, really, what is the TRUE cost of what everyone is complaining about? The cost of most goods will rise a bit due to increase costs of shipping and products that use oil derivatives, sure, but everyone complains about how much it costs to fill up their gas tank, right?

I have a truck. It runs me about 90-100 dollars to fill 'er up. Let's cut the cost of gas by half, so in this scenario it is back in the dream days of $1.25 a gallon or so, so for ease of math, let's say it now costs me $45 dollars to fill up.

The extra cost in a four week month is 90-100 dollars on a big ol' truck. $1200 or so per year. If you are living so tightly that you cannot afford this increase, then you have to carry much of the burden of blame. Live within your means, cut the excess from your expenses, and quit belly aching.

BTW, I am all for drilling until ANWR is swiss cheese. We need to use our natural resources, switch/develop new technologies and let the MIddle eastern countries get back to herding camels.

[HanSolo]

I like the swiss cheese approach as well as new technologies. The new Tulsa is a fully electric car that outperforms a Ferrari and has a 220 mile range. We need more of that quickly.

[saintsfanbrian]

Um - More Refineries = better gas prices. We don't have enough to refine the product that we get in a timely manner.

I also am in favor of other technologies for fuel.

Suing another country is rediculous but we do it all the time

[Mike.357]

Didn't we go to war over 200 years ago because some country was telling us what to do?

I believe it was war with technically, our country

Isn't the profitability of gas companies directly related to record amounts of gasoline and diesel being purchased?

BTW, I am all for drilling until ANWR is swiss cheese.

NOOOOOOOOOOO, let the Arabs use up there stuff first. Lets save ours for when everyone else is running on empty.

electric car

We need a renewable sourse of energy. Not one that will cause our dependency to switch from one fossil fuel to another.

Suing OPEC is about what I would expect from this congess.

[Guest CrazyLincoln]

Just for the record, I didn't vote for any of these idiots. This is the height of arrogance and immaturity. "Let's waste time blaming people instead of solving problems." But I guess thats what gets people reelected these days ...

[Marswolf]

I think we have gone through this gasoline price thing before.

We are dealing with an international market. Yes, the oil companies are making more dollars in profit, but those dollars are worth a lot less than they were before When you factor in the declining value of the dollar in international markets and inflation, their profits are not as outrageous as they seem when they have to buy their raw materials in a non-domestic market. Yes, it hurts to be a consumer when the dollar is not strong, but that weak dollar hurts us directly in anything we buy from foreign sources. To a great extent, they are just trying to maintain their profit level relative to the value of their currency.

And I'll point out again that there is not shortage of supply of oil or refining capacity, at least for now. There are no shortages of gasoline. It just cost more. If there were shortages, and we had plenty of oil, that would be a reason to invest in refining capacity. Right now, it would just be throwing money away for over-capacity.

This is not 1973 where the oil supply was purposely reduced by the oil producing nations. I know most of you don't probably even know about the Arab Oil Embargo in terms of how it affected daily life in this country. But there was not enough oil, largely because we insisted on keeping the value of crude oil artificially low, compared to what it should be in a free market. We ended up with not enough gasoline to supply the nation. We had long gas lines and you could could only buy so much gasoline and that every other day. Prices of gasoline went from around 37 cents to around a dollar a gallon.

Given time, the dollar will get stronger and the price of gasoline and other import dependent goods will settle in where it should be, relative to other material costs.

The final solution has to be for us to quit being beggars for fuel and become energy independent. For that matter we also need to be food independent and labor independent. Working on that would be time much better spent than making fools of ourself suing OPEC.

[Guest darkstar]

Didn't we go to war over 200 years ago because some country was telling us what to do? I believe it was war with technically, our country

Thats a good point there Mike.