House Wants to Sue OPEC over Oil Prices

by Deb Cupples (photo taken May 13) |  Yesterday, Reuters reported:

"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."  (Reuters/NY Times)

It's certainly commendable that the House wants to hold OPEC accountable and has a veto-proof majority.  Two questions: 1) will the Senate go along with it -- and provide a veto-proof majority? and 2) will the Bush-appointed Attorney General actually ensure that investigations are diligently pursued?

I'm just asking.

Last week, I reported gas prices in my North Central Florida city at $3.89 for regular unleaded, up from $3.49 on April 1 and $3.16 from February 1.  Yes, at least at my local gas station, gas has gone up 73-cents a gallon in less than 4 months.

Comments

[Adam]

This makes a lot of sense. The collusion of the oil cartel is a pretty blatant violation of the principles of the WTO, which most OPEC members (including Saudi Arabia) belong to. And a significant increase in supply WOULD actually lower prices.

That said, as I've argued before, gas prices are far too low in the US, which encourages urban sprawl, inefficient cars, and other wasteful habits. Right now most of the other richest nations in the world are paying over $8/gallon. I don't necessarily think we need to tax the price all the way to that level, but a price that reflects the real cost of oil consumption (in pollution, infrastructure maintenance, and tilting of foreign policy) would be higher than what we're paying now.

reference:
http://www.eia.doe.gov/emeu/international/gas1.html

[Pagan Power]

What I find distressing is the fact that the House didn't make a single move to curb this nonsense until they realized citizens were starting to pay attention to the elections.