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Stabenow Cosponsors Bipartisan Legislation to Crack Down on OPEC Price Fixing, Combat High Gas Prices

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"We need to stop oil companies from padding their profits with taxpayer dollars, increase domestic drilling, and get tough on market manipulators."

Tuesday, Jun 14, 2011

With incredibly high gas prices across Michigan, U.S. Senator Debbie Stabenow today announced that she is cosponsoring bipartisan legislation to prevent foreign states-such as members of the Organization of Petroleum Exporting Countries (OPEC)-from conspiring to keep driving up oil prices.  The No Oil Producing and Exporting Cartels Act of 2011 (NOPEC) breaks down judicial roadblocks, giving the Department of Justice the ability to enforce anti-trust laws against OPEC member nations engaging in illegal cartel activities such as price fixing and limiting the production or distribution of oil.

At a meeting in Vienna last week, OPEC did not move to increase global oil production as analysts expected, causing the cost of oil to shoot even higher.

Senator Debbie Stabenow said: "Michigan families are now spending as much on gas as they are on health care and almost as much as on groceries to feed their families. Meanwhile, Middle East cartels are conspiring to raise oil prices and limit supply, gouging Michigan consumers at the pump. OPEC'S price fixing hurts the entire global economy.  This bill cuts judicial red tape so our Justice Department can prosecute OPEC and help prevent future fixing, providing relief for families across our state."

In the past, courts have ruled that OPEC's otherwise illegal activities are protected from prosecution by the Foreign Sovereign Immunities Act and the so-called "act of state" doctrine. The Foreign Immunities Act arguably provides immunity to foreign states from governmental actions it takes, but not commercial activities. In 1979 a Federal District Court ruled that OPEC's cartel activity was governmental activity and therefore immune from prosecution. The "act of state" doctrine holds that a Federal court should not consider a case that will require it to judge the legality of the sovereign acts of a foreign nation.  

The NOPEC bill Senator Stabenow is seeking to pass makes 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.  These changes would make clear that the Department of Justice can bring an antitrust case against OPEC for its price-fixing behavior and collusion.

Joining Senator Stabenow in co-sponsoring the NOPEC bill is lead sponsor Senator Herb Kohl (D-WI), as well as Senators Chuck Grassley (R-IA) , Patrick Leahy (D-VT), Olympia Snowe (R-ME), Charles Schumer (D-NY), Dick Durbin (D-IL), and Frank Lautenberg (D-NJ).

Senator Stabenow has been a long-time advocate for measures to combat high gas prices and has traveled across the state calling for an end to taxpayer giveaways to oil companies to help pay down the deficit, increased domestic drilling, and the development of new clean energy technologies to give consumers more choices and increase market competition. As Chairwoman of the Senate Agriculture Committee, Stabenow also held a hearing earlier this year to investigate the effects of market manipulation on gas prices.

Senator Debbie Stabenow said: "We need to stop oil companies from padding their profits with taxpayer dollars, increase domestic drilling, and get tough on market manipulators.  We also need a fundamental change in our energy policy to break the stranglehold of the oil companies and the Middle East cartels.  Promoting clean energy will help reduce our dependence on foreign oil and create jobs in Michigan."

Major oil companies collected a staggering $36 billion in the first quarter of 2011 alone-nearly $3 billion every week-by taking advantage of Americans who are paying for their gas twice-first paying record high prices at the pump and then paying oil companies again on tax day. Instead of giving away billions every year in oil subsidies, Senator Stabenow voted to eliminate subsidies for oil companies last month in order to reduce the deficit, but the measure didn't get the 60 votes necessary to break a Republican filibuster. Stabenow remains committed to eliminating these subsidies once and for all as part of a long-term plan to reduce the deficit.

Stabenow has been a proponent of more domestic drilling. Earlier this year, she cosponsored "Use-it-or-lose-it" legislation to get oil companies to develop the 60 million acres of land they're currently holding but not using, in some cases just to keep their competitors from drilling there. Oil companies are drilling on less than 25% of federal lands they have leased.

Finally, as a long-time advocate for new clean energy technologies, Senator Stabenow supports the need for a fundamental change in America's energy policy to give consumers more choices beyond foreign oil.  She is the author of the Charging America Forward Act to help put more advanced technology, highly fuel efficient vehicles on the road.  Her bill provides a $7,500 consumer rebate for purchasing electric vehicles.  It also extends medium and heavy-duty truck tax credits, and reauthorizes the advanced battery manufacturing program-a program that has already dramatically increased advanced battery production in the U.S., creating jobs here in Michigan.

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