Senator Kohl Pushes NOPEC Legislation on Senate Floor

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

Speaking on the Senate Floor on February 29, Senator Herb Kohl (D-Wis.) called for support for a measure that would permit the U.S. Department of Justice to bring actions against foreign states—such as members of the Organization of Petroleum Exporting Countries (OPEC)—for collusive practices in settling the price of limiting the production of oil.

Senator Kohl, Chairman of the Judiciary Committee’s Antitrust, Competition, Policy and Consumer Rights Subcommittee, introduced the “No Oil Producing & Exporting Cartels (NOPEC) Act” as an amendment to the Senate Surface Transportation Bill. The full Senate is considering the proposed “Moving Ahead for Progress in the 21st Century America Fast Forward Financing Innovation Act of 2011” or “MAP-21” (S. 1813)—the two-year surface transportation bill.

“[T]his amendment would hold OPEC countries accountable for their actions that contribute to high oil prices,” said Senator Kohl.

The NOPEC amendment has bi-partisan support, according to Kohl. Co-sponsors include Judiciary Committee Chairman Patrick Leahy (D-Ver.) and Senators Chuck Grassley (R-Iowa), Charles Shumer (D-N.Y.), Richard Blumenthal (D-Conn.), Sherrod Brown (D-Ohio), Joe Manchin (D-W.Va.), and Al Franken (D-Minn.).

“Our amendment would allow the Justice Department to crack down on illegal price maintenance by oil cartels,” according to Senator Leahy. “This bill will allow the Federal Government to take legal action against any foreign state, including members of OPEC, for price fixing and artificially limiting the amount of available oil. While OPEC actions remain sheltered from antitrust enforcement, the ability of the governments involved to wreak havoc on the American economy remains unchecked.”

The NOPEC legislation has been considered many times over the last decade. In the current congress, Senator Kohl introduced the bill (S. 394) on February 17, 2011. On April 7, 2011, the Senate Judiciary Committee approved the bill. A similar measure (H.R. 1346) is pending in the House of Representatives.

Railroad Antitrust Exemption

Senator Kohl has introduced another antitrust amendment to MAP-21. Amendment 1591 would repeal the existing antitrust exemptions for freight railroads. This amendment is identical to the proposed “Railroad Antitrust Enforcement Act of 2011” (S. 49), which was introduced in 2011. The measure has passed the Judiciary Committee by overwhelming margins in this Congress as well as in the law two, according to Kohl.

The proposal would bring railroad mergers and acquisitions under the purview of the Clayton Act, allowing the federal government, state attorneys general, and private parties to file suit to enjoin anticompetitive mergers and acquisitions. Railroad mergers and acquisitions are currently reviewed by the Surface Transportation Board (STB). Moreover, the proposal would eliminate the exemption that prevents FTC scrutiny of railroad common carriers and the antitrust exemption for railroad collective ratemaking.

“This bill simply seeks to end the special exemption from antitrust law enjoyed by freight railroads, an exemption which is both wholly unwarranted and raises prices to shippers and consumers every day,” said Senator Kohl. “[B]y clearing out this thicket of outmoded antitrust exemptions, this amendment will cause railroads to be subject to the same laws as the rest of the country.”