As gas prices surge, NOPEC Act would open up worlds biggest intergovernmental oil organization, OPEC, to price-fixing lawsuits

Would such a judicial case bring down your tab at the pump?

Gas prices are up more than 50 percent over the past year. As of this writing, AAA reports that the national average is $3.04 per gallon, versus $1.97 a year ago.

A good deal of that is due to rising demand, as people once again work from offices rather than at home, attend school in person rather than virtually, and everything from restaurants to entertainment venues reopen at full capacity.

Other causes, though, lie overseas. The Organization of Petroleum Exporting Countries (OPEC) is a 13-member coalition of nations in the Middle East, Africa, and South America which controls about 79 percent of the world’s oil reserves. They deliberately cut production in March and April. (Although two member nations, Russia and Kazakhstan, were granted exemptions.)

Cutting production artificially raises prices, by lessening supply and thus making each individual barrel of oil more valuable. Many analysts accused OPEC’s production cuts to be a form of price fixing, which is illegal in the U.S. — but the U.S. isn’t a member of OPEC. So can anything be done?

The NOPEC (No Oil Producing and Exporting Cartels) Act would explicitly allow the Justice Department to bring antitrust lawsuits for price fixing in oil — even against a foreign country, or a body controlled by a foreign nation or nations.

The exact legislative text allows such lawsuits against a “cartel or any other association or form of cooperation,” but the bill’s acronym makes clear that it’s primarily aimed at OPEC.

The Senate version was introduced on March 25 as S. 977, by Sen. Chuck Grassley (R-IA). The House version was introduced on two weeks later on April 8 as H.R. 2393, by Rep. Steve Chabot (R-OH1).

Supporters argue the status quo keeps oil prices higher than what the free market price, a collusion that hurts American consumers everytime they go to the gas station.

“It’s long past time to put an end to illegal price fixing by OPEC,” Sen. Grassley said in a press release. The oil cartel and its member countries need to know that we are committed to stopping their anti-competitive behavior.”

“We, in the United States, have been working for years to develop our domestic clean, renewable and alternative energy resources. We’re also committed to reducing our reliance on foreign oil, especially when it’s artificially and illegally priced,” Sen. Grassley continued. “Our bill shows the OPEC members we will not tolerate their flagrant antitrust violations.”

“As we have seen time and again, when oil prices are low, international oil cartels ramp up their price-gouging efforts in order to manipulate the global crude oil market,” Rep. Chabot said in a separate press release. “It’s high time that we do more to fight the artificial production controls that continue to keep the price of crude oil and gasoline arbitrarily high in the United States.”

Unsurprisingly, OPEC itself opposes the legislation, countering that the basic claims underlying it are inaccurate.

“OPEC is neither a cartel nor involved in the business of fixing oil prices,” OPEC Secretary-General Mohammad Barkindo told Reuters. “It would be a misjudgment to accuse us of such.”

“OPEC is an open, transparent organization focused on assisting the oil markets to remain in balance on a sustainable basis, which is a fundamental requirement of investors,” Barkindo continued. “The international oil industry needs market stability to plan and invest in a predictable manner in order to guarantee future supplies.”

Opponents may also argue that even if you indeed consider OPEC to have engaged in price fixing, perhaps recent events have proven that necessary. Oil prices turned negative for the first time in April 2020, shortly after the pandemic-induced global economic crash. (Although the price of oil has since rebounded approximately the same levels it stood in 2018 and 2019.)

Prior versions from 2018 and 2019 both passed the House Judiciary Committee, controlled by Republicans for the former and Democrats for the latter, indicating potential bipartisan cooperation. However, neither version received a vote in the full chamber.

The current version also passed the House Judiciary Committee on a voice vote in April, and now awaits a potential vote by the full House.

If cosponsorship is indicative, though, that may be less likely than for the two previous versions. 2018’s version attracted six bipartisan cosponsors: four Republicans and two Democrats. Then 2019’s version attracted a notably larger 33 bipartisan cosponsors: 22 Republicans, 10 Democrats, and one independent. 2021’s version, introduced by a Republican, has so far attracted only two cosponsors, both Democrats.

The cosponsorship has remained static in the Senate. The 2018, 2019, and 2021 versions all attracted three bipartisan cosponsors: two Democrats and one Republican. And specifically the same two Democrats and one Republican: Sens. Amy Klobuchar (D-MN), Patrick Leahy (D-VT), and Mike Lee (R-UT).

None of those three versions has received a Senate Judiciary Committee vote.

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This article was written by GovTrack Insider staff writer Jesse Rifkin.

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