January 12, 2009

Watch out OPEC, here comes NOPEC!

OPEC is so last century. (Well, it was founded in 1960; you could look it up.)

But now the oil cartel may have met its match. Here comes NOPEC, a creation of Sen. Herb Kohl, D-WI, who hopes to get the U.S. Department of Justice to take on OPEC's "collusive practices" in setting the price of oil or limiting the amount of production, Never mind that those practices are exactly why OPEC was formed by those 12 oil-producing nations half a century ago.

Kohl today introduced his bipartisan legislation allowing the Department of Justice to bring actions against foreign countries to prevent future gasoline price increases.

NOPEC stands for No Oil Producing & Exporting Cartels.

"This legislation will authorize our government, for the first time, to take action against the illegal conduct of the OPEC oil cartel,” Kohl said. “The time is now for the U.S. government to fight back on efforts to fix the price of oil and hold OPEC accountable when it acts illegally.

"Our legislation 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."

Kohl’s NOPEC legislation would make it clear that OPEC’s activities are not protected by sovereign immunity and that the federal courts should not decline to hear such a case based on the "act of state" doctrine. It clears away these judicially created roadblocks, he says, so the Department of Justice could bring an antitrust case against OPEC for price-fixing.

Kohl explains:
The Federal Trade Commission has estimated that 85 percent of the variability in the cost of gasoline is the result of changes in the cost of crude oil. Throughout 2007 and 2008, crude oil and gasoline prices marched steadily upwards, peaking last summer at over $140 per barrel for crude and well over $4 per gallon for gasoline. In recent months, these prices have plummeted as demand has dropped due to the serious global economic recession. However, despite declining prices, the global oil cartel remains intact and a major force conspiring to raise oil prices to the detriment of American consumers.

On Oct. 24, 2008, OPEC agreed to cut production by 1.5 million barrels a day, and on Dec. 17, OPEC agreed to a further 2.2 million barrels a day production cut. And the OPEC cartel makes no secret of its motivation for these production cuts. OPEC President Chakib Khelil put it very simply in an interview published Dec. 23, 2008, “Without these cuts, I don’t think we’d be seeing $ 43 [per barrel] today, we’d have seen in the $20s. . . . [H]opefully by the third quarter [of 2009] we will see prices rising.” In another interview in December, Khelil was quoted as saying “The stronger the decision [to cut production], the faster prices will pick up.”
Co-sponsors of the bill include Sens. Arlen Spector (R-Pa.), Patrick Leahy (D-Vt.), Chuck Grassley (R-Iowa), Russell Feingold (D-Wis.), Olympia Snowe (R-Maine), Charles E. Schumer (D-N.Y.), Dick Durbin (D-Ill.), Carl Levin (D-Mich.), Frank Lautenberg (D-N.J.) and Sherrod Brown (D-Ohio).

In the last session of Congress, the legislation was passed overwhelmingly by the Senate as an amendment to the Energy Bill and by the House of Representatives as a stand-alone measure, in both instances with veto-proof majorities. But it was left out when the two versions of the Energy Bill were reconciled.


  1. You do understand this would have no effect on OPEC, right?
    Now drill here drill now would have so would use clean coal...

  2. Pete - Is this your own original work or just a quick re-write of Kohl's press release?

  3. Would you believe a slow rewrite?

  4. It would cost the equivalent of 60 cents a gallon to charge and drive an electric car.The electricity to charge the car could come from solar or wind generated electricity.If all gasoline cars,trucks,and suv’s instead had plug-in electric drive trains, the amount of electricity needed to replace gasoline is about equal to the estimated wind energy potential of the state of N.D.This past year the high cost of fuel so seriously damaged our economy and society that the ripple effects will be felt for years to come.Why not invest in setting up some alternative energy projects on a national basis, create clean cheap electricity,create millions of badly needed new green collar jobs, and get out from under our dependence on foreign oil.What a win-win situation that would be. There is a great new book out called The Manhattan Project of 2009 Energy Independence NOW by Jeff Wilson. I highly recommend this book for anyone interested in alternative energy. www.themanhattanprojectof2009.com

  5. Pete, you didn't attend Herb's big press conference when this momentous announcement was made? That's why some readers might expect you to refer to the press release in the body of your piece.

  6. Beyond Green - YES!!!! I hope you do everything in your powers to make this happen!