House panel passes bill targeting OPEC oil supply cuts
Washington. A U.S. House of Representatives committee approved a bill that would open up the Organization of the Petroleum Exporting Countries to antitrust lawsuits, but it was uncertain if the measure would be considered by the full chamber.
The House Judiciary Committee passed the bipartisan bill, known as the No Oil Producing and Exporting Cartels Act, or NOPEC, on a voice vote.
The legislation would change U.S. antitrust law to revoke the sovereign immunity that has long protected OPEC members from U.S. lawsuits. It allows the U.S. attorney general to sue the oil producers group or any of its members on grounds of collusion.
A similar bill was introduced in the Senate on Thursday by Republican Senator Chuck Grassley, a proponent of ethanol, a corn-based motor fuel.
Versions of the bill have appeared without success in Congress for the past 20 years. The committee also approved a version of the bill last year by voice vote, but it never reached the full House for a vote.
The legislation has gained momentum as President Donald Trump, a Republican, has attacked OPEC, which includes U.S. ally Saudi Arabia, over past practices of holding back oil output to support oil prices.
Trump supported NOPEC in a book published in 2011, before he became president. Still, as president, he has not voiced support for NOPEC and has stressed the importance of the U.S. relationship with Saudi Arabia, and sales of military equipment to the kingdom, even after the killing of journalist Jamal Khashoggi in the Saudi consulate in Istanbul last year.
The White House did not immediately respond to a request for comment on the committee’s passage of the bill.
No groundswell, while oil price is low
Joe McMonigle, senior energy policy analyst at Hedgeye in Washington and an Energy Department official under former President George W. Bush, said odds were low the bill would advance during a time of relatively low oil prices.
“I don’t see any kind of groundswell for it,” McMonigle said. He said that even though Trump had not voiced support for NOPEC, Democrats, who now control the House, would be cautious to hand Trump something that could turn into a victory for him.
Lawmakers in Texas are also unlikely to support the bill, McMonigle added, as Motiva Enterprises LLC , a subsidiary of Saudi state oil company Saudi Aramco, operates a large refinery in the state.
U.S. oil prices CLc1 fell more than 2.5 percent on Thursday to $52.64 a barrel on plentiful U.S. inventories and worries about global demand growth.
McMonigle said that if oil prices rose to $100 a barrel sometime in the future, “all bets are off” and support in Congress could rise, reports Reuters.
The oil and gas industry group the American Petroleum Institute and the U.S. Chamber of Commerce have opposed NOPEC, saying that booming U.S. energy output has reduced OPEC’s influence. International energy companies have also opposed the legislation, saying it could spur OPEC countries to take retaliatory action.
Saudi Arabia and non-OPEC producer Russia boosted output last summer before Trump reimposed sanctions on Iran’s oil exports. But OPEC’s output fell in January by the largest amount in two years as its Gulf allies over-delivered on a supply cutting plan to boost prices and amid the Iran sanctions.