Anti-OPEC bill receives second life in U.S. Congress
(Bloomberg) – Long-standing legislation that would allow the U.S. to take the dramatic step of suing OPEC nations was reintroduced Wednesday by a bipartisan group of senators, though it’s not clear that the bill’s prospects are any better than they’ve been in the past.
The “No Oil Producing and Exporting Cartels Act,” also known as NOPEC, would enable the U.S. government to sue members of the Organization of Petroleum Exporting Countries for manipulating the energy market, potentially seeking billions of dollars in reparations.
Various versions of the bill have been introduced several times over the past two decades, but the legislation, which could have wide-ranging impacts for geopolitics and the defense industry as well as energy markets, has never made it to the finish line.
The White House hinted last year, amid surging gasoline and oil prices and OPEC+’s decision to cut output caps by 2 MMbpd, it might back the bill. Senate Majority Leader Chuck Schumer said in October the bill was on the table amid other legislative responses, but the measure was never brought to the floor.
“Along with cherry blossoms, introduction of NOPEC is a sign spring is approaching in Washington,” said Bob McNally, president of Rapidan Energy Group and a former White House official. “As the idea does enjoy bipartisan support, you can’t rule out that one day it’ll pass, but NOPEC basically gets introduced almost every year and goes nowhere.”
Under the legislation, the Justice Department could bring lawsuits against members for antitrust violations. Analysts have said the mere prospects of such an action could spark a dramatic crude selloff. While OPEC hasn’t set prices since the 1980s, its members periodically agree to boost or cut production.
The legislation passed both chambers of Congress in 2007, with backing from then-Senator Joe Biden, only to die amid a veto threat from President George W. Bush.
“We’ve seen time and again how OPEC has colluded to set global oil prices, bringing uncertainty and high prices to consumers around the globe,” Senator Chuck Grassley, the Iowa Republican who introduced the bill Wednesday, said in a statement.