Congress eyeing ‘NOPEC’ bill to take on Saudi Arabia
by Rachel Frazin and Zack Budryk - 10/12/22 6:00 AM ET
Momentum is building in Congress in support of legislation that would take on the OPEC+ group of oil-producing nations that just announced cuts in production likely to help Russia and raise prices in the United States.Senate Majority Leader Charles Schumer (D-N.Y.) recently floated using the legislation, known as “NOPEC,” as one way to respond to the group, which includes Saudi Arabia and Russia.
Some lawmakers on both sides of the aisle have gone even further, saying that the decision by the Saudi-led group to reduce production by 2 million barrels a day is a reason to significantly shift relations with Riyadh.
The White House has not explicitly backed the bill, but said following the production cut announcement that it would “consult with Congress on additional tools and authorities to reduce OPEC’s control over energy prices.”
On Tuesday, the White House told reporters that President Biden believes the U.S. should review the Saudi relationship given the production cuts.
“Certainly, in light of recent developments and OPEC+’s decision about oil production, the president believes that we should review the bilateral relationship with Saudi Arabia and to take a look to see if that relationship is where it needs to be and that it is serving our national security interests,” White House national security spokesperson John Kirby told reporters during a call.
The NOPEC legislation would enable the Justice Department to bring lawsuits against the OPEC+ countries and their state-owned oil companies under U.S. antitrust laws.
Durbin has called for its passage in the lame-duck session after the November midterm elections.
Schumer has said he was “looking at” the bill but stopped short of calling for its passage.
“We are looking at all the legislative tools to best deal with this appalling and deeply cynical action, including the NOPEC bill,” he said in a recent statement.
A number of Democrats have expressed a desire to respond to the cuts.
“There’s got to be consequences … whether it’s lifting the cartel’s immunity, or whether it’s rethinking our troop presence there, I just think it’s time to admit that the Saudis are not looking out for us,” said Sen. Chris Murphy (D-Conn.) in a recent CNN interview.
On the other side of the aisle, the bill’s GOP sponsors have also argued that recent developments bolster the legislation’s importance.
A statement released by Sen. Chuck Grassley (R-Iowa) last week said that the senator would add the NOPEC bill, which he sponsored, as an amendment to the National Defense Authorization Act, which Congress is expected to take up when it returns in November.
“My bipartisan NOPEC Act would crack down on these tactics by the foreign oil cartel. It’s already cleared the Judiciary Committee on a bipartisan basis, and there’s no reason why it shouldn’t pass as a part of our upcoming defense authorization effort. Our energy supply is a matter of national security,” Grassley said in the statement.
Grassley spokesperson Taylor Foy told The Hill this week that he believes there’s “bipartisan support” for including the legislation in the defense bill.
The NOPEC bill was spearheaded by Grassley, as well as Sens. Mike Lee (R-Utah), Amy Klobuchar (D-Minn.) and Patrick Leahy (D-Vt).
Lee’s office similarly said via email that the senator believes “recent events have demonstrated why it is so needed now more than ever, and he looks forward to working with his colleagues in the Senate to get it to the President’s desk as soon as possible.”
The bill advanced out of the Judiciary Committee in a bipartisan 17-4 vote, winning support from every committee Democrat as well as GOP Sens. Lindsey Graham (S.C.), Ted Cruz (Texas), Josh Hawley (Mo.), Tom Cotton (Ark.), Marsha Blackburn (Tenn.), Grassley and Lee.
But some Republicans oppose the legislation, and the party may be hesitant to hand Democrats a win.
In a Fox News interview last week, No. 3 Senate Republican John Barrasso (Wyo.) said “that’s not going to go anywhere,” when asked about the bill and other Democratic policy suggestions.
“We need American energy. We have it here,” he said.
Democrats in particular are under pressure to show they are doing something to address high gas prices as Republicans make the issue part of their midterm attacks.
Analyst Claudio Galimberti told The Hill he did not think the NOPEC bill would actually solve the price problem.
“The impact of this NOPEC bill on the market is minimal as it is self-defeating,” he said in an email.
“A lawsuit is open to all sorts of retaliation from OPEC, which would actually decrease, not increase the supply of oil. The only solution to low supply from OPEC is more supply from elsewhere,” he added.
Similar bills have been considered in the past.
In 2007, the House passed a version of the bill in a widely bipartisan vote, but it was opposed by the Bush administration.
The threat of retaliation by the Saudis and other OPEC members has been a reason for opposition in the past.
“One interesting question is … the US also authorizes certain types of cartels, especially in agriculture,” said former Federal Trade Commissioner William Kovacic, who is now the director of George Washington University’s Competition Law Center. “Would the OPEC countries adopt legislation that subjects those government-authorized collusive schemes to prosecution as well, where they seek to retaliate by going after basically U.S. agricultural products?”
Historically, Kovacic said, the State Department in particular has been apprehensive about the impact of such a law, “because these involve extraordinarily delicate questions of foreign policy and international relations.”
“If you want to resolve the disputes and disagreements with these countries, do you use diplomatic negotiations and leverage as the method to do it? Or do you say ‘to hell with it’?” he said.
https://thehill.com/policy/3683770-congress-eyeing-nopec-bill-to-take-on-saudi-arabia/
