By Chris Baltimore - Reuters
Tuesday Jun 19, 2007
WASHINGTON (Reuters) - The U.S. Senate on Tuesday approved
a plan that would enable the federal government to sue OPEC
for price manipulation, but the White House has threatened
to veto the measure and opponents warned OPEC members could
retaliate by turning off the taps.
The bill, sponsored by Democrat Herb Kohl of Wisconsin and
Republican Arlen Specter of Pennsylvania, would revoke the
sovereign immunity members of the Organization of the Petroleum
Exporting Countries enjoy from U.S. legal action. It would
allow the Justice Department to sue OPEC nations in U.S. courts.
The Senate voted 70-23 to attach the proposal to energy legislation
the chamber is expected to vote on by the end of the week.
The body had approved a similar measure in 2005 but it was
dropped before the bill was finalized.
The House of Representatives last month voted 345-72 to approve
the "No Oil Producing and Exporting Cartels Act of 2007," or "NOPEC." The
White House has threatened to veto the measure, and even if
it became law, the Bush administration's Justice Department
would have to initiate any lawsuit.
With Americans frustrated at gasoline pump prices above $3
a gallon, Congress members have called for America to insulate
itself from foreign oil producers like Saudi Arabia, Venezuela
and Iran.
"While OPEC enjoys its newfound riches the average American
consumer suffers every time he or she visits the gas pump or
pays a home heating bill," Kohl said.
The bill's opponents admitted that it was popular but warned
that OPEC nations source of about a third of the world's oil
could reciprocate and sue the United States in their courts.
"This is one of those feel-good amendments where you
can tell your constituents you struck a blow for freedom against
OPEC," said Sen. Jeff Bingaman, chairman of the Senate
Energy Committee. "But they would do the same thing to
us."
Sen. Pete Domenici of New Mexico, the energy panel's senior
Republican, said the plan would be unenforceable and would
hurt U.S. consumers more than it would OPEC.
"OPEC producers could just decide not to sell oil to
us any longer," Domenici said. "They would suffer
the loss of some profits but our entire economy could come
to a grinding halt."
The United States, the world's biggest crude oil consumer,
relies on imports for about 60 percent of its daily needs.
A large slice of U.S. imports come from non-OPEC members like
Canada and Mexico, but OPEC members like Venezuela, Nigeria
and Saudi Arabia supply significant quantities.
The White House has been hesitant to chide OPEC even with
U.S. crude oil futures prices close to $70 a barrel.
If the bill becomes law, it would give the Justice Department
the authority to sue oil cartels, and the measure is aimed
squarely at the 12-member OPEC group.
A labor group sued OPEC in 1978 under the Sherman Antitrust
Act, but a U.S. appeals court rejected the case in 1981 on
the grounds that OPEC's members were immune to lawsuits because
their decisions were "acts of state" on behalf of
foreign governments.
The House and Senate plans would revoke that immunity and
allow the Justice Department to file a lawsuit if it sees fit.
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