House passes bill to sue OPEC; White House threatens veto

[Galvatron]

Link

WASHINGTON (Reuters) - The House of Representatives overwhelmingly approved legislation on Tuesday allowing the Justice Department to sue OPEC members for limiting oil supplies and working together to set crude prices, but the White House threatened to veto the measure.

The bill would subject OPEC oil producers, including Saudi Arabia, Iran and Venezuela, to the same antitrust laws that U.S. companies must follow.

The measure passed in a 324-84 vote, a big enough margin to override a presidential veto.

The legislation also creates a Justice Department task force to aggressively investigate gasoline price gouging and energy market manipulation.

"This bill guarantees that oil prices will reflect supply and demand economic rules, instead of wildly speculative and perhaps illegal activities," said Democratic Rep. Steve Kagen of Wisconsin, who sponsored the legislation.

The lawmaker said Americans "are at the mercy" of OPEC for how much they pay for gasoline, which this week hit a record average of $3.79 a gallon.

The White House opposes the bill, saying that targeting OPEC investment in the United States as a source for damage awards "would likely spur retaliatory action against American interests in those countries and lead to a reduction in oil available to U.S. refiners."

The administration said less oil going to refineries would limit available gasoline supplies and raise fuel prices.

Foreign investment in U.S. oil infrastructure has declined in the last decade. But the state-owned oil companies of several OPEC nations are owners of U.S. refineries, and those investments could be affected if the legislation becomes law, said Arlington, Virginia-based FBR Capital Markets Corp.

The bill also requires the Government Accountability Office to carryout a study on the effects of prior oil company mergers on energy prices.

The Senate would still have to approve the House measure.

The Senate previously approved similar legislation as part of a broad energy bill. However, the OPEC-suing provision was removed after White House opposition in order to get the underlying energy legislation signed into law.

Can't have Bush's oil baron buddies getting some comeuppance, now can we?

[Natorgator]

Do they have any jurisdiction whatsoever?

I don't think there's any conspiracy to raise prices. This is just another attempt by Congress to make it look like they're doing something instead of actually trying to solve problems.

[Invictus ChiKen]

Okay if I remember properly there is a way to over ride a presidential veto with two thirds majority...

If my math is right they have enough votes from this 324 that if they vote again they can do the override. IF I am right...

[CmdrWilkens]

Do they have any jurisdiction whatsoever?

I don't think there's any conspiracy to raise prices. This is just another attempt by Congress to make it look like they're doing something instead of actually trying to solve problems.

They have jurisdiction over assets that are in the US which is what the bill targets so yes they do have some means of going after them. Whether its smart or not well that I won't say.

[Sidewinder]

What, are those in control of the House (Democrats?) trying to COMPOUND the disaster that is American foreign policy? Are they trying to beat W's Operation Iraqi Freedom in terms of futility? (I'd like to say W won, but after Hillary's "totally obliterate Iran," I'm worried his successor will STILL press for an Operation Iranian Freedom or something to top him.)

[Red]

... huh?

Please forgive my absolute ignorance, but where would they sue the OPEC countries? The international court has no real power, do they? I mean, what would we developed countries do if OPEC ignored an unfavorable ruling? Impose sanctions and stop buying oil?

o wait.

... on a peak oil line of discussion, though, wouldn't it be better to start antagonizing the exporters now? Far better to get into hardcore oil negotiation battles now--and so start waking people up to the need to move off fossil fuels NOW--than to continue to play their game and continue to rely blindly on oil?

[Darth Wong]

... huh?

Please forgive my absolute ignorance, but where would they sue the OPEC countries? The international court has no real power, do they?

They intend to sue OPEC-owned American interests, thus suing OPEC itself only by proxy. Of course, this would tend to act as a severe disincentive for OPEC countries to continue investing money in America, and these politicians are pushing it even though OPEC flow of capital into America has helped keep the American economy afloat through trying times.

[Edi]

Remember, socializing private assets is only bad when furriners do it to Amerikan-owned companies and their stuff, but when the US does it to assets owned by stinking ragheads, it's A-okay!

If the OPEC wants to retaliate, they can sell the oil elsewhere, China and India would take as much off their hands as they can provide and if the US gets nothing at all, how much will that hurt?

[Darth Wong]

I look forward to seeing American politicians suing American companies which happen to be majority-owned by OPEC investors, and then watching the OPEC investors selling off those companies and laying off the American employees. Now that would be amusing political theatre.

[Lonestar]

Remember, socializing private assets is only bad when furriners do it to Amerikan-owned companies and their stuff, but when the US does it to assets owned by stinking ragheads, it's A-okay!

If the OPEC wants to retaliate, they can sell the oil elsewhere, China and India would take as much off their hands as they can provide and if the US gets nothing at all, how much will that hurt?

Not as much as you'd think. I'd reckon we'd come up with a reason to topple Chavez pretty quick tho'....

[Wanderer]

Remember, socializing private assets is only bad when furriners do it to Amerikan-owned companies and their stuff, but when the US does it to assets owned by stinking ragheads, it's A-okay!

If the OPEC wants to retaliate, they can sell the oil elsewhere, China and India would take as much off their hands as they can provide and if the US gets nothing at all, how much will that hurt?

Not as much as you'd think. I'd reckon we'd come up with a reason to topple Chavez pretty quick tho'....

Only to see him blow his Oil Wells before we take them and Iran Sanction the World for such blatant Aggression by cutting its Oil Exports by a third.

[Invictus ChiKen]

So wait... Bush did something right by vetoing this... An the Democrats almost fucked us up on a Budh level...



The large boom sound you hear is my head exploding...

[Lonestar]

Only to see him blow his Oil Wells before we take them

Oh, like Saddam did in '03?

and Iran Sanction the World for such blatant Aggression by cutting its Oil Exports by a third.

Yeah, I'm sure that will help it's tottering economy.

[Edi]

Lonestar, your country is in no shape to start new wars. Most of your hardware is way the fuck on the other side of the world and you don't have the capacity to open a third front. You could bomb Venezuela to the stone age, true, but there's no way you could dig Chavez out of the jungle and the international backlash from invading Venezuela would be epic after all the other shit you have pulled.

No, the only thing you can do is tighten the belt, grind your teeth and pay more for gas. Anything else will just bite you in the arse hard.

[Lonestar]

Lonestar, your country is in no shape to start new wars. Most of your hardware is way the fuck on the other side of the world and you don't have the capacity to open a third front. You could bomb Venezuela to the stone age, true, but there's no way you could dig Chavez out of the jungle and the international backlash from invading Venezuela would be epic after all the other shit you have pulled.

No, the only thing you can do is tighten the belt, grind your teeth and pay more for gas. Anything else will just bite you in the arse hard.

Edi, despite all advice to the contrary, that didn't stop this Administration from charging into Iraq with a severally undermanned force. I didn't say that we would be successful, but I have no problem visualizing this administration giving it a crack again.

[Adrian Laguna]

Can't have Bush's oil baron buddies getting some comeuppance, now can we?

None of "Bush's oil baron buddies" are members of the OPEC, the OPEC is not responsible for high oil prices, the OPEC has been helping keep our economy afloat, and finally everyone's profits are starting to come down as consumers cut back on usage due to high prices. Suing anyone is nothing but mindless and counter-productive pandering, Bush is in the right by threatening to veto, and he should veto it if it comes to his desk.

In short, your statement is stupid and ill informed. For its part, Congress is reminding me why I don't like the Democrats better than the Republicans, but merely hate them less.

[Galvatron]

In short, your statement is stupid and ill informed.

I wasn't talking about OPEC. I meant that, if anything, Congress should be casting their gaze on the domestic oil companies that have been posting record profits all this time--assuming even that would amount to anything more trivial than their bullshit about steroids in baseball.

[Natorgator]

In short, your statement is stupid and ill informed.

I wasn't talking about OPEC. I meant that, if anything, Congress should be casting their gaze on the domestic oil companies that have been posting record profits all this time--assuming even that would amount to anything more trivial than their bullshit about steroids in baseball.

Their profit margin is around 9%. Not exactly obscene, compared to other industries.

[Mr Bean]

Their profit margin is around 9%. Not exactly obscene, compared to other industries.

Except of course, it does rather hold all the records for "most profit EVAAR!!"
You can say company X or Company Y has a 22% profit margin(Which IS obscene for company's) but then you ask, well how much did company Y make? Twenty million?

While the poor old old company's only made 40 billion dollars, boo hoo they did not manage to beat Sudan's entire GDP this year.

Plus as noted, some oil company's have 10% or even 20% profit margins.
(Those however are not making 40 billion dollar yearly profits.)

[Rogue 9]

Look, if a company moves as much volume of stock as oil companies do with gasoline, it is going to make seemingly obscene profits when you look at the raw number of dollars; the trick is, what's their revenue? The much-ballyhooed billions of dollars the oil industry is putting in the bank is a mere fraction of the trillions upon trillions in revenue that goes through their hands; their income is high, but so are their expenditures. When you're talking about the amount of money the oil industry is dealing with, even the smallest of profit margins will return a seemingly ridiculous amount.

[Wanderer]

Oh, like Saddam did in '03?

Saddam never wanted to destroy his oil wells and gave orders that they not be destroyed. A few commanders thought otherwise. If Saddam really wanted to destroy his oil wells he would have given the orders to do so before we invaded.

Yeah, I'm sure that will help it's tottering economy.

Actually it will as it will jack up the price on the world market and leave more for their domestic market which they carefully ration and control despite appearances to the contrary. They seen what rampant capitalism does to us and the world and they don't want it.

They are also expanding their refineries and searching for alternatives to oil. Also why they are not giving up nuclear power.

The Iranians despite most people's thought to the contrary have a long term plan to avoid the effects of Oil shocks to the world economy. They only need to avoid Bush attacking them till he is out of office and they can deal with a far more rational U.S. President who doesn't want to make them a whore to American Interests.

[Sea Skimmer]

If the OPEC wants to retaliate, they can sell the oil elsewhere, China and India would take as much off their hands as they can provide and if the US gets nothing at all, how much will that hurt?

That’s economically impossible for OPEC, and India and China will NOT be simply stepping up to buy millions of additional barrels per day they have no use for at a cost of billions of dollars.

[Drooling Iguana]

Wow. Bush is actually doing something right. Anyone have a recent weather report from Hell? I'd imagine it's getting pretty chilly down there right about now.

If OPEC is artificially limiting supply right now then good for them. It'll give us more incentive to find alternatives to oil now while there's still some left rather than wait until we've run out completely and are royally fucked. If I were an American I'd be writing my senators right now to tell them how stupid this bill would be and advising them to kill it before they embarrass themselves.

[Glocksman]

As someone else on another board pointed out about this BS: go ahead and seize OPEC nation owned assets in the US and then watch OPEC say 'Fine. Oil is now priced in Euros.'

Given our trade imbalances, that'd probably shoot oil above the $200/bbl mark pretty quickly.

[Raw Shark]

Okay if I remember properly there is a way to over ride a presidential veto with two thirds majority...

If my math is right they have enough votes from this 324 that if they vote again they can do the override. IF I am right...

You mean like it says in the article?

Bush did something right by vetoing this...

What the fuck are you talking about? Do you not even remember making your previous post?

An the Democrats almost fucked us up on a Budh level...

There are a lot fewer than 324 Democrats in the House, dumbass.