Congress eyeing ‘NOPEC’ bill to take on Saudi Arabia

Momentum is building in Congress to support legislation that would adopt the OPEC+ group of oil-producing nations that have just announced production cuts that are likely to help Russia and raise prices in the United States. Senate Majority Leader Charles Schumer (DN.Y.) recently used legislation known as “NOPEC” as a way to respond to the group that includes Saudi Arabia and Russia.

Some lawmakers on both sides of the aisle have gone even further, saying the Saudi-led group’s decision to cut production by 2 million barrels a day is a reason for a major shift in relations with Riyadh.

The White House did not explicitly support the bill, but said after the production cut announcement that it would “consult Congress on additional tools and agencies to reduce OPEC’s control over energy prices.”

On Tuesday, the White House told reporters that President Biden believes the US should review ties with Saudi Arabia amid production cuts.

“Certainly, given the recent developments and the OPEC+ decision on oil production, the President believes that we should review the bilateral relationship with Saudi Arabia and see if those relationships are where they need to be and if they serve us national security interests,” White House national security spokesman John Kirby told reporters during a call.

The NOPEC legislation would allow the Justice Department to bring lawsuits against OPEC+ countries and their state oil companies under US antitrust laws.

Durbin has called for its passage in the lame duck session following November’s midterm elections.

Also Read :  ‘It’s only very recently that I started reading books on filmmaking’

Schumer has said he “looked at” the bill but stopped calling for its passage.

“We are reviewing all legislative tools to best deal with this appalling and deeply cynical action, including the NOPEC law,” he said in a recent statement.

A number of Democrats have expressed a desire to act on the cuts.

“There must be consequences … whether it lifts the cartel’s immunity or whether it reconsiders our troop presence there, I just think it’s time to admit the Saudis aren’t looking out for us,” Sen. Chris Murphy (D-Conn.) said in a recent CNN interview.

Across the aisle, the GOP sponsors of the bill have also argued that recent developments reinforce the legislation’s importance.

A statement released last week by Sen. Chuck Grassley (R-Iowa) said the senator would add the NOPEC bill he is sponsoring as an amendment to the National Defense Authorization Act, which Congress is expected to take up when it comes back in November.

“My bipartisan NOPEC bill would crack down on these foreign oil cartel tactics. It’s already been cleared by the Judiciary Committee on a bipartisan basis, and there’s no reason why it shouldn’t pass as part of our upcoming defense clearance efforts. Our energy supply is a matter of national security,” Grassley said in the statement.

Grassley spokesman Taylor Foy told The Hill this week that he believes there is “bipartisan support” for including the legislation in the Defense Bill.

Also Read :  Indonesia earthquake: Search underway as magnitude-5.6 earthquake leaves over 200 dead in West Java

The NOPEC bill was led by Grassley, along with Sens. Mike Lee (R-Utah), Amy Klobuchar (D-Minn.) and Patrick Leahy (D-Vt).

Lee’s office similarly said via email that the senator believes “recent events have demonstrated why it is more necessary now than ever, and he looks forward to working with his Senate colleagues to bring it about.” to the President’s desk as soon as possible.”

The bill came out of the Judiciary Committee by a 17-4 bipartisan vote, winning the support of all Democrats on the committee as well as the GOP scythes. Lindsey Graham (SC), Ted Cruz (Texas), Josh Hawley (Mo.), Tom Cotton (Ark.), Marsha Blackburn (Tenn.), Grassley and Lee.

But some Republicans oppose the legislation, and the party may be reluctant to hand Democrats a win.

In a Fox News interview last week, Senate Republican No. 3 John Barrasso (Wyo.) said “this isn’t going to get anywhere” when asked about the bill and other Democrat policy proposals.

“We need American energy. We have it here,” he said.

Democrats in particular are under pressure to show they are doing something about high gas prices as Republicans make the issue part of their midterm attacks.

Analyst Claudio Galimberti told The Hill he didn’t think the NOPEC bill would actually solve the pricing problem.

“The market impact of this NOPEC law is minimal because it is self-defeating,” he said in an email.

Also Read :  Saudi real estate markets rise as ground realities change: JLL CEO

“A lawsuit is open to all manner of OPEC retaliation that would actually decrease, not increase, oil supply. The only solution to OPEC’s low supply is more supply from elsewhere,” he added.

Similar calculations have been checked in the past.

In 2007, the House of Representatives passed a version of the bill in a largely bipartisan vote, but it was defeated by the Bush administration.

Threats of retaliation from the Saudis and other OPEC members have been a source of resistance in the past.

“An interesting question is … the US also sanctions certain types of cartels, particularly in agriculture,” said former Federal Trade Commissioner William Kovacic, who is now director of George Washington University’s Competition Law Center. “Would OPEC countries pass legislation that would also criminalize these government-sanctioned collusions if they try to retaliate by targeting primarily US agricultural products?”

Historically, Kovacic said, the State Department in particular has been concerned about the implications of such a law “because these are extraordinarily sensitive foreign policy and international relations issues.”

“If you want to resolve the disputes and disagreements with these countries, do you use diplomatic negotiations and leverage as a method to do so? Or do you say ‘the hell with it’?” he said.

Alexander Bolton and Alex Gangitano contributed to this.


Leave a Reply

Your email address will not be published.