In a March 10 posting entitled "The Price of Oil, OPEC And Our Laws," I called for a renewed effort to prosecute OPEC for restraint of trade. I urged our government to divest the cartel of its protection under the foreign sovereign immunity doctrine and permit the Justice Department to go after OPEC in the same fashion it would prosecute any other group that conspired to manipulate markets and fix prices.
The article itself was met with considerable derision from readers, mostly ascribing its basic tenets as unrealistic, pointing to a Congress incapable or unwilling to act and an administration tightly linked with the oil industry.
And yet, miraculum dictum, suddenly things have changed. On April 27 the Senate Judiciary Committee approved bipartisan legislation that seeks to promote competition in the oil and gas industries in order to reduce fuel costs. Among the key measures of the legislation would be to prevent companies from withholding oil and gas in an effort to raise prices, and, most significantly, to permit OPEC members to be sued for conspiring to control output and raise prices.
Will these actions help? We certainly won't know unless we try. If successful in the courts, can damages actually be assessed and collected. Perhaps, but, at a minimum, it would serve as a wake up call to OPEC that their compliant, somnolent victim is waking up. No doubt the oil patch won't like it, but the longer we snooze away the higher prices will go and the fatter their bottom lines. Now the question becomes will the Judiciary Committee have the firepower to see this legislation through or will the oil patch and their "K" Street lobbyists and the White House kill it before it gets out of joint committee with the House?
An augury of the difficulties ahead was evident on May 2. The Center for Strategic and International Studies, a Washington research group, hosted a convivial panel discussion with Saudi Arabia's oil minister Ali al-Naimi prominently in attendance. Also there was Exxon-Mobil's CEO Rex W. Tillerson, a large number of oil executives, government officials, industry analysts, and journalists. To Al-Naimi's right sat a smiling Samuel W. Bodman, our energy secretary. The gathering had the odor of a reception held in honor of a Wehrmacht general in Vichy France. In obsequious submission, our Mr. Bodman assured Mr. al-Naimi that the administration was opposed to the bill in Congress that would open the door to antitrust suits against OPEC. Bodman's saying so makes it crystal clear where the oil industry and the administration stand on this issue.
It is also crystal clear that if the media doesn't take hold of this issue the oil industry and the administration will prevail.