Bipartisan
Legislation Introduced Today
Seeks To Foster Competition And Reduce Oil And Gas Prices
Legislation Available Online
Washington, D.C.
(April 6) — Today a bipartisan group
of Senate Judiciary Committee members introduced legislation that
seeks to promote competition in the oil and gas industries in order
to reduce fuel costs.
This legislation would keep fuel
prices low by preventing companies from withholding oil and gas in
an effort to raise prices. A joint federal and state task force is
also created by the legislation to investigate information sharing
between oil companies to determine if that practice has encouraged
anti-competitive pricing.
Additionally, the legislation aims to
foster competition by requiring the antitrust enforcement agencies
(Department of Justice, the Federal Trade Commission) to consider
whether future consolidations need closer scrutiny. Furthermore,
the legislation permits OPEC members to be sued for conspiring to
control output and fix prices for crude oil. The Senate has
already passed anti-competitive provisions in this bill that stem
from the bipartisan NOPEC legislation that the Judiciary Committee
has approved several times. Those provisions were added to last
year's energy bill that passed the Senate. While these provisions
have been passed by the Senate previously, they have never been
passed by the House of Representatives and signed into law.
The legislation is sponsored by
Senator Arlen Specter, Senate Judiciary Committee Chairman, and Sen.
Herb Kohl (D-WI). The legislation is co-sponsored by Senators: Mike
DeWine (R-OH), Richard Durbin (D-Il), Dianne Feinstein (D-CA), and
Patrick Leahy (D-VT) the Judiciary Committee’s ranking member.
“Over 2,600 mergers have occurred in
the U.S. petroleum
industry since the 1990’s, including transactions involving the
largest oil and gas companies in the nation,” said Sen. Specter.
“With the high fuel prices the American consumer is enduring, it is
time for an examination of what oil and gas industry consolidations
have done to prices. This legislation takes a firm stand in an
attempt to protect the American consumer from enormous increases in
gasoline prices and oil prices.”
News reports are stating that
Americans could pay as much as $3 or more per gallon of gas this
summer. With prices continuing to skyrocket, increased competition
among companies, which this legislation promotes, is needed to
ensure that Americans are paying a fair price at the pump.
“Congress should pass this bill
immediately instead of waiting until the price at the pump
skyrockets any higher. OPEC has
America over a barrel, and we should
fight back,” said Leahy, who has co-sponsored the NOPEC legislation.
“It is wrong to let OPEC producers off the hook just because their
anti-competitive practices come with the seal of approval of this
cartel’s member nations.”
“High fuel costs are affecting every
family, whether they’re driving across town, or heating their
homes,” said Senator DeWine, Chairman of the Judiciary Subcommittee
on Antitrust, Business Rights, and Competition. “This bill would
help ensure oil and gas industry mergers are not contributing to
rising costs, and allow government agencies to take action to
prevent collusive price-fixing by oil producing nations.”
"There is much debate about the causes
of high gas prices. It's clear that worldwide demand and supply
limitations play a role. But our investigation in the Judiciary
Committee has made plain the facts that make many of us suspect that
oil and gas markets are not behaving in a truly competitive
fashion," Kohl said. "And the oil industry has unquestionably
enriched itself during this period of high prices."
“Oil companies are reaping record
profits at the same time that gasoline prices are skyrocketing. The
cost of a gallon of gas is nearing 40 cents more than a year ago and
it is expected to climb much higher during the summer months.
Something is wrong. It is time that Congress takes a closer look at
the mergers and market consolidation that the federal government has
allowed over the last decade. Competition needs to be encouraged
and oil and gas companies must not be allowed to manipulate the
market at the expense of consumers,” said Senator Feinstein.
The Committee has held two hearings on
February 1, and March
14, 2006 to examine this issue and review the draft legislation. At
both hearings, the Committee heard significant testimony indicating
that companies in the oil and gas industry have the ability to
exercise market power.
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