Mr. President, I rise today to introduce, with Senator DeWine and 11 co-sponsors, of the No Oil Producing and Exporting Cartels Act of 2005 ("NOPEC"). It is time for the U.S. government to fight back on the price of oil and hold OPEC accountable when it acts illegally. This bill will hold OPEC member nations to account under U.S. antitrust law when they agree to limit supply or fix price in violation of the most basic principles of free competition.

Our bill will authorize the Attorney General and Federal Trade Commission to file suit against nations or other entities that participate in a conspiracy to limit the supply, or fix the price, of oil. In addition, it will expressly specify that the doctrines of sovereign immunity and act of state do not exempt nations that participate in oil cartels from basic antitrust law. Senator DeWine and I have introduced this bill in each of the last three Congresses. This legislation was the subject of an extensive hearing at the Antitrust Subcommittee last year, and subsequently passed the Judiciary Committee without dissent. It is now time, in this new Congress, to finally pass this legislation into law and give our nation a long needed tool to counteract this pernicious and anti-consumer conspiracy.

Throughout the last year, consumers all across the nation have watched gas prices rise to previously unimagined levels. As crude oil prices exceeded $ 40, then $ 50 and then $ 55 per barrel, retail prices of gasoline over $ 2.00 per gallon became commonplace. While prices temporarily receded for short periods, the general trend was significantly upwards, and rising even today. We now hear predictions that the price of crude oil may soon break the $ 60 barrier, and oil industry analysts even say $ 80 per barrel is not unthinkable. And one fact has remained consistent -- any move downwards in price would end as soon as OPEC decided to cut production. The price of crude oil danced to the tune set by OPEC members. Such blatantly anti-competitive conduct by the oil cartel violates the most basic principles of fair competition and free markets and should not be tolerated.

Mr. President, real people suffer real consequences every day in our nation because of OPEC's actions. Rising gas prices are a silent tax that takes hard-earned money away from Americans every time they visit the gas pump. Higher oil prices drive up the cost of transportation, harming thousands of companies throughout the economy from trucking to aviation. And those costs are passed on to consumers in the form of higher prices for manufactured goods. Higher oil prices mean higher heating oil and electricity costs. Anyone who has gone through a Midwest winter can tell you about the tremendous personal costs associated with higher home heating bills.

We have all heard many explanations offered for rising energy prices. Some say that the oil companies are gouging consumers. Some blame disruptions in supply. Others point to the EPA requirement mandating use of a new and more expensive type of "reformulated" gas in the Midwest or other "boutique" fuels around the country. Some even claim that refiners and distributors have illegally fixed prices. On this issue, Senator DeWine and I have repeatedly asked the Federal Trade Commission to investigate these allegations. As a result of our requests, the FTC has put a task force in place to find out if those allegations were true. While we continue to urge the FTC to be vigilant, the FTC has to date found no evidence of illegal domestic price fixing as a cause of higher gas prices. And we conducted our own inquiry in the Antitrust Subcommittee last year which found no basis to challenge the FTC's conclusions.

But one cause of these escalating prices is indisputable: the price fixing conspiracy of the OPEC nations. For years, this conspiracy has unfairly driven up the cost of imported crude oil to satisfy the greed of the oil exporters. We have long decried OPEC, but, sadly, no one in government has yet tried to take any action. Our bill will, for the first time, establish clearly and plainly that when a group of competing oil producers like the OPEC nations act together to restrict supply or set prices, they are violating U.S. law. The bill will not authorize private lawsuits, but it will authorize the Attorney General or FTC to file suit under the antitrust laws for redress. Our bill will also make plain that the nations of OPEC cannot hide behind the doctrines of "Sovereign Immunity" or "Act of State" to escape the reach of American justice. In so doing, our bill will overrule one twenty-year old lower court decision which incorrectly failed to recognize that the actions of OPEC member nations was commercial activity exempt from the protections of sovereign immunity.

Mr. President, the most fundamental principle of a free market is that competitors cannot be permitted to conspire to limit supply or fix price. There can be no free market without this foundation. And we should not permit any nation to flout this fundamental principle.

Some critics of this legislation have argued that suing OPEC will not work or that threatening suit will hurt more than help. I disagree. Our NOPEC legislation will, for the first time, enable our antitrust authorities to take legal action to combat the illegitimate price-fixing conspiracy of the oil cartel. It will, at a minimum, have a real deterrent effect on nations that seek to join forces to fix oil prices to the detriment of consumers. This legislation will be the first real weapon the U.S. government has ever had to deter OPEC from its seemingly endless cycle of price increases.

There is nothing remarkable about applying U.S. antitrust law overseas. Our government has not hesitated to do so when faced with clear evidence of anti-competitive conduct that harms American consumers. A few years ago, for example, the Justice Department secured record fines totaling $ 725 million against German and Swiss companies engaged in a price fixing conspiracy to raise and fix the price of vitamins sold in the United States and elsewhere. Their behavior harmed consumers by raising the prices consumers paid for vitamins every day and plainly needed to be addressed. As this and other cases show, the mere fact that the conspirators are foreign nations is no basis to shield them from violating these most basic standards of fair economic behavior.

Even under current law, there is no doubt that the actions of the international oil cartel would be in gross violation of antitrust law if engaged in by private companies. If OPEC were a group of international private companies rather than foreign governments, their actions would be nothing more than an illegal price fixing scheme. But OPEC members have used the shield of "sovereign immunity" to escape accountability for their price-fixing. The Foreign Sovereign Immunities Act, though, already recognizes that the "commercial" activity of nations is not protected by sovereign immunity. And it is hard to imagine an activity that is more obviously commercial than selling oil for profit, as the OPEC nations do. Our legislation will establish that the sovereign immunity doctrine will not divest a U.S. court from jurisdiction to hear a lawsuit alleging that members of the oil cartel are violating antitrust law.

Mr. President, the suffering of consumers across the nation in the last year has made me more certain than ever that this legislation is necessary. Between OPEC's repeated decisions to cut oil production and the FTC's conclusion for the last several years that there is no illegal conduct by domestic companies responsible for rising gas prices, I am convinced that we need to take action, and take action now, before the damage spreads too far.

I urge my colleagues to support our legislation so that our nation will finally have an effective means to combat this price-fixing conspiracy of oil-rich nations. Thank you.

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