The weekend past, the most auto traveled of the year, gasoline hit a record Labor Day high. It is well past time for all our branches of government, in the name of the nations bludgeoned consumers, to stop playing doormat to the oil interests, most especially the machinations of the Organization of Petroleum Exporting Countries (OPEC).
The United States is the world's largest consumer of oil, and instead of using its massive purchasing power to forge a level playing in the oil market it has consistently permitted OPEC, and oil interests piggybacking on OPEC's manipulations (to ever higher oil/gasoline prices), to make us dance to their tune, hiding under the preposterous umbrella of 'sovereign immunity,' permitting OPEC's collusive practices countenanced by an out of touch U.S. judicial branch of government, as though sovereign economic aggression was analogous to not giving parking tickets to cars with diplomatic plates. This has now gone on for years with a near fivefold increase in the price of oil since the turn of the century with nary a push back from our government or its agencies.
Yet some years ago, in 2007, there was a genuine effort to change the equation in a fundamental way when Congress voted overwhelmingly, in defiance of the oil lobby and their allied interests for the NOPEC bill, so named because it would allow the international oil cartel, OPEC, and its national oil companies operating outside the law, hiding behind our sovereign immunity shield, to be sued and held accountable for what are clearly anti-competetive attempts to limit the world's supply of petroleum and the consequent impact on oil prices.
In defiance of oil interests Congress voted overwhelmingly for the Bill (70 votes to 23 in the Senate and 345 to 72 in the House). This was an act of refreshing and courageous leadership by our Congress only to be abandoned after President George W. Bush, that great stalwart of oil interests and friend of Saudi Arabia, made it clear that he would veto the bill should it land on his desk.
Anti-OPEC legislation has a long history and varied forms of a NOPEC bill have been introduced some 16 times since 1999, only to be vehemently resisted by the oil industry, its allied oil interests like the American Petroleum Institute and their legion of "K" Street Lobbyists, fully cognizant that the higher OPEC can push oil prices the greater the profits for domestic oil companies. Then, of course, the diplomatic pressure by potentially impacted national interests as the assertion of the UAE's oil minister Mohamed bin Dhaen al-Hamli not so subtle threat, "If the U.S. wants to sue (OPEC) member countries it's extremely dangerous."
In 2000, the proposed bill took form as the "Oil Price Reduction Act and International Energy Fair Pricing Act" seeking to force the president to reevaluate or even suspend economic and security ties to those states engaged in "oil price fixing to the detriment of the U.S. economy."
The legal loophole has not only permitted collusion among OPEC member states to impact the price and availability of oil, but equally insidious has permitted their national oil companies, the instruments of OPEC manipulation, to control important swaths of America's refinery capacity such as PDVSA, Venezuela's national oil company's ownership of CITGO with its significant refineries at Corpus Christie TX., Lamont, ILL., and Lake Charles, LA. supplying 13,500 domestic gasoline stations, thereby having direct impact on U.S. gasoline prices and availability. This while on May 31 of this year a valve turning ceremony took place at Port Arthur, LA. signaling the completion of the Motiva Enterprises Refinery, owned 50 percent by Saudi Aramco and 50 percent by Shell, of their 600,000b/d refinery expansion, making it the largest refinery in the U.S.
Opportunistically situated at Port Arthur with its access to the world's shipping lanes, it is strategically placed to export petroleum-based commodities such as gasoline, diesel, heating oil, etc. to world markets taking pricing pressure off America's growing production of oil and keeping oil prices up, which is Saudi Aramco's primary strategic business, and Shell's not far behind. Ironically perhaps, perhaps better said purposefully with malice aforethought, the plants 600,000 b/d capacity is almost the equivalent of America's new oil frontier, North Dakota, with its daily oil production of 600,000 barrels/day.
In the face of OPEC and oil interests riding roughshod over the nations economic interests, this administration showed its true colors in the eye-opening court case, litigated during the past year:
United States District Court for the Southern District of Texas (No. 06-3569) Spectrum Stores Inc.....et al Plaintiffs-Appellants
CITGO Petroleum Corporation; Petroleos De Venezuela S.A. ....et.al.
With the plaintiffs charging that the Venezuelan State Oil Company is "liable under the Sherman Act for its participation in a global price-fixing conspiracy with the OPEC member nations and other private oil companies."
Given the issue of "Sovereign Immunity" the court asked the Obama administration to file a brief commenting on the merits of the complaint. Incredibly, the administration filed an amicus brief upholding the defendants argument that the plaintiffs had no standing because of the principle of 'Sovereign Immunity' and joined by the Department of State, Treasury, Energy and Justice Departments.
This was a sea change from not only the president's position, but also his Secretary of State, Hillary Clinton when both were serving in the Senate. Then Senator Clinton was co-sponsor of the "S.879 (110th): No Oil Producing and Exporting Cartels (NOPEC) Act of 2007" sponsored by Senator Herbert Kohl (D-Wis.) on March 17, 2007 -- "a bill to amend the Sherman Act to make oil-producing and exporting cartels illegal." As cited above the Bill was introduced in April of that year but was not enacted.
- To limit oil production/distribution of oil/natural gas
- To set or maintain the price of oil/natural gas
- To otherwise take any action in restraint of trade for oil/natural gas
- When such collective action has a direct, substantial and reasonably foreseeable effect on the market supply, price, or distribution of oil and natural gas in the U.S.
On February 29 of this year Sen. Herb Kohl, Chairman of the Senates Judiciary Committee, introduced once again the "No Oil Producing & Export Cartels (NOPEC) Act." Senator Kohl's clarion call is lucid and should finally be heeded:
"Now is the time, with the people we represent seeing soaring energy prices eat into their family budgets, to finally pass this legislation into law and give our nation a long needed tool to counteract this pernicious and anti-consumer conspiracy."
Clearly the Bill has gone nowhere because it did not have the administration's support. And therein lies the crux of the issue.
Is the Obama administration as pathetically submissive to OPEC and oil industry pressures as the Bush administration? How would they deal with this issue if they were given "four more years." And not to be left out, how would a Romney administration handle this hot potato? These are important questions that need be asked now, before the election, so Americans will have an understanding on whose side the next elected President is on, the oil barons or the battered American consumer.
Listen to Raymond Learsy on WHDD an NPR station: http://podcasts.am1020whdd.com/~am1020wh/shows/play.php?id=19631