110TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 110–160 

NO OIL PRODUCING AND EXPORTING CARTELS ACT OF 2007 

(NOPEC) 

MAY 21, 2007.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. CONYERS, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

together with 

SUPPLEMENTAL VIEWS 

[To accompany H.R. 2264] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 2264) to amend the Sherman Act to make oil-producing and 

exporting cartels illegal, having considered the same, reports favorably thereon with an amendment and recommends that the bill as 

amended do pass. 

CONTENTS 

Page 

The Amendment ...................................................................................................... 2 

Purpose and Summary ............................................................................................ 2 

Background and Need for the Legislation ............................................................. 3 

Hearings ................................................................................................................... 6 

Committee Consideration ........................................................................................ 6 

Committee Votes ...................................................................................................... 6 

Committee Oversight Findings ............................................................................... 6 

New Budget Authority and Tax Expenditures ...................................................... 6 

Congressional Budget Office Cost Estimate .......................................................... 6 

Performance Goals and Objectives ......................................................................... 7 

Constitutional Authority Statement ...................................................................... 8 

Advisory on Earmarks ............................................................................................. 8 

Section-by-Section Analysis .................................................................................... 8 

Changes in Existing Law Made by the Bill, as Reported ..................................... 8 

Supplemental Views ................................................................................................ 10 

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1 U.S. Energy Information Administration, Country Analysis Briefs —Non-OPEC Fact Sheet, 

Nov. 2005, at http://www.eia.doe.gov. 

THE AMENDMENT

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘No Oil Producing and Exporting Cartels Act of 

2007’’ or ‘‘NOPEC’’. 

SEC. 2. SHERMAN ACT. 

The Sherman Act (15 U.S.C. 1 et seq.) is amended by adding after section 7 

the following: ‘‘SEC. 7A. (a) It shall be illegal and a violation of this Act for any foreign state, 

or any instrumentality or agent of any foreign state, to act collectively or in combination with any other foreign state, any instrumentality or agent of any other foreign state, or any other person, whether by cartel or any other association or form 

of cooperation or joint action— ‘‘(1) to limit the production or distribution of oil, natural gas, or any other 

petroleum product; ‘‘(2) to set or maintain the price of oil, natural gas, or any petroleum product; or ‘‘(3) to otherwise take any action in restraint of trade for oil, natural gas, 

or any petroleum product; 

when such action, combination, or collective action has a direct, substantial, and 

reasonably foreseeable effect on the market, supply, price, or distribution of oil, natural gas, or other petroleum product in the United States. ‘‘(b) A foreign state engaged in conduct in violation of subsection (a) shall not 

be immune under the doctrine of sovereign immunity from the jurisdiction or judgments of the courts of the United States in any action brought to enforce this section. ‘‘(c) No court of the United States shall decline, based on the act of state doctrine, to make a determination on the merits in an action brought under this section. ‘‘(d) The Attorney General of the United States may bring an action to enforce 

this section in any district court of the United States as provided under the antitrust laws.’’. 

SEC. 3. SOVEREIGN IMMUNITY. 

Section 1605(a) of title 28, United States Code, is amended— (1) in paragraph (6), by striking ‘‘or’’ after the semicolon; 

(2) in paragraph (7), by striking the period and inserting ‘‘; or’’; and 

(3) by adding at the end the following: 

‘‘(8) in which the action is brought under section 7A of the Sherman Act.’’. 

PURPOSE AND SUMMARY

With control of 40% of the world’s production, OPEC has substantial influence over the price of oil. OPEC member nations have 

extensive oil reserves and therefore can readily increase supply and 

lower prices. In addition, many of the non-OPEC oil-producing 

countries—such as the United States—have large private oil-producing sectors. These companies have very little spare production 

capacity and cannot easily increase production in the event of 

shortages or otherwise expand to increase market share. 1

H.R. 2264, the ‘‘No Oil Producing and Exporting Cartels Act of 

2007 or ‘NOPEC,’ ’’ deems it to be illegal and a violation of our Nation’s antitrust law for any foreign state, or any instrumentality or 

agent of any foreign state, to act collectively whether by cartel or 

any other form of cooperative action to limit the production or distribution of oil, natural gas, or any other petroleum product or to 

set the price of such commodities. The bill exempts OPEC and 

other Nations from the provisions of the Foreign Sovereign Immumstockstill on PROD1PC66 with HEARING

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2See http://www.opec.org/home. 

nities Act to the extent those governments are engaged in price-fixing and other anticompetitive activities with regard to pricing, production, and distribution of petroleum products. It also makes clear 

that the so-called ‘‘act of state’’ doctrine does not prevent courts 

from ruling on antitrust charges brought against foreign governments, and that foreign governments are ‘‘persons’’ subject to suit 

under the antitrust laws. Finally, it authorizes the Department of 

Justice to bring lawsuits in Federal court against oil cartel members. 

BACKGROUND AND NEED FOR THE LEGISLATION

BACKGROUND ON OPEC

The Organization of Petroleum Exporting Countries (OPEC) produces approximately 40% of the world’s petroleum. The OPEC 

countries include Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. OPEC states that its mission ‘‘to coordinate & unify the petroleum policies of Member Countries & ensure the stabilization of 

oil prices in order to secure an efficient, economic & regular supply 

of petroleum to consumers, a steady income to producers & a fair 

return on capital to those investing in the petroleum industry.’’ 2

OPEC, to fulfill its stated mission, has taken steps throughout 

the years to control the supply and price of crude oil in an effort 

to ‘‘stabilize’’ prices and secure ‘‘a steady income to producers.’’ To 

this end, OPEC has undertaken numerous actions, as a matter of 

routine, to fix supply and prices. These actions, as compiled by the 

United States Energy Information Administration, include the following concerted actions taken in recent years: 

• September 24, 2003: OPEC decides to lower its production 

quota from 25.4 million barrels per day to 24.5 million barrels per day, effective November 1, 2003. 

• February 10, 2004: OPEC decides to lower OPEC’s production quota from 24.5 million barrels per day to 23.5 million 

barrels per day, effective April 1, 2004. 

• March 31, 2004: OPEC re-confirms the new production ceiling of 23.5 million barrels per day effective April 1, 2004, 

which was agreed upon on February 10, 2004. 

• June 3, 2004: OPEC decides to increase its production quota 

to 25.5 million barrels per day effective July 1, 2004, and to 

26.0 million barrels per day effective August 1, 2004. 

• September 15, 2004: OPEC decides to increase its production 

quota to 27.0 million barrels per day effective November 1, 

2004. 

• December 10, 2004: OPEC decides to output quotas unchanged, but pledges to cut overproduction over quota levels 

by 1 million barrels per day effective January 1, 2005. 

• January 30, 2005: OPEC decides to leave its target production levels unchanged, and to temporarily suspend its price 

band mechanism. 

• March 16, 2005: OPEC decides to increase its production 

quota to 27.5 million barrels per day effective immediately. 

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3 U.S. Energy Information Administration, Country Analysis Briefs—OPEC, Aug. 6, 2006, at 

http://www.eia.doe.gov. 4 U.S. Energy Information Administration, Country Analysis Briefs—Non-OPEC Fact Sheet, 

Nov. 2005, at http://www.eia.doe.gov. 5Section 1 of the Sherman Act provides in pertinent part: 

Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint 

of trade or commerce among the several States, or with foreign nations, is declared to 

be illegal. Every person who shall make any contract or engage in any combination or 

conspiracy hereby declared to be illegal shall be deemed guilty of a felony [punished 

as provided by law]. 

15 U.S.C.A. § 1 (2006). 

Although § 1 of the Sherman Act provides criminal penalties for price-fixing and other restraints of trade, other provisions of the antitrust laws provide for civil enforcement. For example, section 15 of the Clayton Act provides, in pertinent part: 

That the several district courts of the United States are hereby invested with jurisdiction to prevent and restrain violations of this Act, and it shall be the duty of the several 

district attorneys fo the United States, in their respective districts, under the direction 

of the Attorney General, to institute proceedings in equity to prevent and restrain such 

violations. 

15 U.S.C.A. § 25 (2006). 

• June 15, 2005: OPEC decides to increase its production 

quota to 28 million barrels per day effective July 1, 2005 and 

authorizes an additional 500,000 barrels per day increase in 

its quotas ‘‘should oil prices remain at current levels or continue to rise further.’’ OPEC also decides to replace its previous OPEC reference basket of seven crude oils with a new 

one consisting of eleven crude streams, effective June 16, 

2005. 

• September 19, 2005: OPEC agrees to make available to the 

market all of the spare capacity in member countries (estimated at 2 million barrels per day by OPEC), should it be 

called for, for a period of 3 months, starting October 1, 2005. 

• December 12, 2005: OPEC decides to leave output quotas unchanged. 

• January 31 , 2006: OPEC decides to leave output quotas unchanged. 

• March 8, 2006: OPEC decides to leave output quotas unchanged. 

• June 1, 2006: OPEC decides to leave output quotas unchanged. 3

Even though OPEC controls ‘‘only’’ 40% of the world’s production, 

its influence over prices is substantial. First, the OPEC countries 

have extensive reserves and can easily increase supply and lower 

prices. Second, many of the non-OPEC oil-producing countries—

such as the United States—have large private oil-producing sectors. These companies have very little spare production capacity 

and cannot easily increase production in the event of shortages or 

otherwise expand to increase market share. 4

ANTITRUST ANALYSIS

If private actors collusively controlled supply and prices in the 

manner that OPEC member nations do, there is no question that 

their conduct would be illegal as a per se violation of the Sherman 

Act, and that they would be subject to criminal and civil liability. 5

Typically, however, foreign states are immune from suit in Federal 

court. Section 1604 of title 28 of the United States Code provides 

that a ‘‘foreign state shall be immune from the jurisdiction of the 

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6 28 U.S.C.A. § 1604 (2006) 7 28 U.S.C.A. § 1605(a)(2) (2006). 8 International Ass’n of Machinists v. Organization of Petroleum Exporting Countries, 477 

F.Supp. 553, 568 (C.D. Cal 1979). The district judge reasoned, ‘‘This Court agrees that this ‘com- mercial activity’ should be defined narrowly. . . . From the evidence presented to this Court, 

it is clear that the nature of the activity engaged in by each of these OPEC member countries 

is the establishment by a sovereign state of the terms and conditions for the removal of a prime 

natural resource to wit, crude oil from its territory.’’ Id. at 567. 9The Ninth Circuit rested its decision not on the grounds that sovereign immunity precluded 

the suit, but on the ‘‘act of state doctrine.’’ 10 Rus the bill authorizes only the Department of Justice to enforce NOPEC, the Executive 

Branch necessarily will consider the foreign policy implications of such a suit before bringing 

charges. 

courts of the United States and of the States [with specific exceptions].’’ 6

One exception to sovereign immunity applies where the suit ‘‘is 

based upon a commercial activity carried on in the United States 

by the foreign state; or upon an act performed in the United States 

in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in 

connection with a commercial activity of the foreign state elsewhere 

and that act causes a direct effect in the United States.’’ 7

Although the coordination of oil production by the OPEC countries as a means of controlling price levels would appear to be a 

‘‘commercial activity’’—and therefore not protected by sovereign immunity—a district court in 1979 held otherwise. The district judge 

concluded that the act of an OPEC member nation ‘‘establishing 

the terms and conditions for removal of natural resources from its 

territory’’ was a ‘‘governmental activity,’’ not a commercial activity 

within the meaning of the exception to the principles of foreign sovereign immunity. 8 The court dismissed the antitrust suit brought 

by a labor union against OPEC. One purpose of H.R. 2264 is to reaffirm that the antitrust laws do indeed apply to the OPEC nations 

in their role as commercial actors, engaging in such collusion, 

where such conduct impacts the United States. 

The other obstacle to antitrust lawsuits against OPEC is the ‘‘act 

of state’’ doctrine, which commands courts to avoid review of the 

actions of foreign governments and to defer certain disputes with 

foreign government to the political branches of the government. 

This doctrine was cited by the Ninth Circuit in affirming the dismissal of the case discussed above. 9

H.R. 2264 minimizes any ‘‘act of state’’ doctrine concerns with 

bringing an antitrust action against the OPEC nations, because it 

entrusts to the Executive Branch the discretion whether to bring 

charges under this provision. 10 A court’s concern about insinuating 

itself in matters properly within the bailiwick of the political 

branches is mitigated when Congress, by this legislation, and the 

Executive Branch, by bringing the action, explicitly authorizes judicial involvement. 

The NOPEC legislation was first introduced in the 106th Congress, and has been reintroduced in every Congress since. It was 

reported by the Senate Committee on the Judiciary, with considerable bipartisan support, in the 106th Congress, again in the 108th 

Congress, and again in the 109th Congress. In the 109th Congress, 

the bill passed the Senate as a provision in the Energy Policy Act 

of 2005. In the 110th Congress, the Senate Committee on the Judiciary ordered the bill favorably reported on April 25, 2007, by 

unanimous consent. 

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HEARINGS

On May 16, 2007, the Antitrust Task Force of the Committee on 

the Judiciary held an oversight hearing on the subject of market 

failure in the oil industry and the possible uses of the antitrust 

laws to restore competition in that industry, during which the 

NOPEC legislation was a major topic of discussion. Witnesses at 

the hearing included Representatives Bart Stupak (D-MI) and 

Heather Wilson (R-NM); Richard Blumenthal, Attorney General for 

the State of Connecticut; Dr. John Felmy, chief economist at the 

American Petroleum Institute; and Mark Cooper, director of research for the Consumer Federation of America. 

COMMITTEE CONSIDERATION

On May 17, 2007, the Committee met in open session and ordered the bill, H.R. 2264, favorably reported with an amendment, 

by voice vote, a quorum being present. 

COMMITTEE VOTES

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that there were 

no recorded votes during the Committee’s consideration of H.R. 

2264. 

COMMITTEE OVERSIGHT FINDINGS

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 

NEW BUDGET AUTHORITY AND TAX EXPENDITURES

Clause 3(c)(2) of rule XIII of the Rules of the House of Representatives is inapplicable because this legislation does not provide new 

budgetary authority or increased tax expenditures. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, the Committee sets forth, with respect to 

the bill, H.R. 2264, the following estimate and comparison prepared 

by the Director of the Congressional Budget Office under section 

402 of the Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, May 18, 2007. 

Hon. JOHN CONYERS, Jr., Chairman, 

Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 2264, the No Oil Producing and Exporting Cartels Act of 2007. 

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If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Daniel Hoople, who can 

be reached at 226–2860. 

Sincerely, 

PETER R. ORSZAG, DIRECTOR. 

Enclosure 

cc: Honorable Lamar S. Smith. 

Ranking Member 

H.R. 2264—No Oil Producing and Exporting Cartels Act of 2007. 

H.R. 2264 would seek to prohibit foreign states from working collectively to limit the production, set the price, or otherwise restrain 

the trading of petroleum and natural gas when such actions affect 

U.S. markets. The bill would authorize the Department of Justice 

(DOJ) to enforce the legislation by filing antitrust actions in federal 

courts. The bill also would provide that foreign states that restrain 

trade in petroleum and natural gas would not be immune from the 

judgment of U.S. courts under the doctrine of sovereign immunity. 

CBO cannot estimate a precise cost of implementing H.R. 2264 

because we have no basis for assessing the likelihood that the Administration might initiate antitrust actions against foreign states 

under the bill. Based on information from DOJ on the costs of investigations of alleged antitrust violations, CBO estimates that 

similar investigations to those that might be brought under H.R. 

2264 could cost up to $4 million per year, subject to appropriation 

of the necessary funds. 

H.R. 2264 could result in the collection of additional criminal or 

civil penalties. Collections of criminal fines are recorded in the 

budget as revenues, which are deposited in the Crime Victims 

Fund and later spent. Civil fines are also recorded as revenues. 

CBO cannot estimate the impact of H.R. 2264 on direct spending 

and revenues because we cannot determine whether DOJ would file 

suit against alleged violators, whether the agencies would win such 

legal action, or how much in penalties might be collected by federal 

agencies. In any case, enacting those provisions would either have 

no significant net impact on the deficit or would reduce future deficits (through collections of civil fines). 

H.R. 2264 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

impose no costs on State, local, or tribal governments. 

On May 4, 2007, CBO transmitted a cost estimate for S. 879, the 

No Oil Producing and Exporting Cartels Act of 2007, as ordered reported by the Senate Committee on the Judiciary on April 25, 

2007. The two bills are similar, and our cost estimates are the 

same. 

The CBO staff contact for this estimate is Daniel Hoople, who 

can be reached at 226–2860. This estimate was approved by Peter 

H. Fontaine, Deputy Assistant Director for Budget Analysis. 

PERFORMANCE GOALS AND OBJECTIVES

The Committee states that pursuant to clause 3(c)(4) of rule XIII 

of the Rules of the House of Representatives, H.R. 2264 enables the 

United States Department of Justice to bring lawsuits in Federal 

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court against nations that engage in conduct designed to fix the 

price of oil. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds the authority for this legislation in article I, section 8, clause 3 of the Constitution. 

ADVISORY ON EARMARKS

In accordance with clause 9 of rule XXI of the Rules of the House 

of Representatives, H.R. 2264 does not contain any congressional 

earmarks, limited tax benefits, or limited tariff benefits as defined 

in clause 9(d), 9(e), or 9(f) of Rule XXI. 

SECTION-BY-SECTION ANALYSIS

The following discussion describes the bill as reported by the 

Committee. 

Sec. 1. Short title. This section sets forth the short title of the bill 

as the ‘‘No Oil Producing and Exporting Cartels Act of 2007 or 

(NOPEC).’’

Sec. 2. Sherman Act. Section 2(a) makes it illegal for any foreign 

state, or instrumentality or agent of any foreign state, to act collectively with others to: (1) limit the production of, (2) set or maintain 

the price of, or (3) otherwise retrain trade for oil, natural gas, or 

any other petroleum product, when such action has a direct, substantial, and reasonably foreseeable effect on the market, supply, 

price, or distribution of oil, natural gas, or other petroleum product. 

In substance, this clarifies that the Sherman Act reaches international state actors in the petroleum production business. 

Subsection (b) provides that a foreign state engaged in conduct 

under subsection (a) shall not be immune under the doctrine of sovereign immunity from the jurisdiction or judgments of the courts 

of the United States. Subsection (c) provides that the courts shall 

not decline to hear cases brought under section 2 based on the ‘‘act 

of state’’ doctrine. Subsection (d) provides that the Attorney General of the United States may bring an action to enforce this section. 

Sec. 3. Sovereign Immunity. Section 3 amends the Foreign Sovereign Immunity Act, 28 U.S.C. § 1605(a), to make it explicit that 

sovereign immunity does not protect a country for actions brought 

under new section 7A of the Sherman Act. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, 

existing law in which no change is proposed is shown in roman): 

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SHERMAN ACT 

Be it enacted by the Senate and House of Representatives of the 

United States of America in Congress assembled, That this Act may 

be cited as the ‘‘Sherman Act’’. 

* * * * * * * 

SEC. 7A. (a) It shall be illegal and a violation of this Act for 

any foreign state, or any instrumentality or agent of any foreign 

state, to act collectively or in combination with any other foreign 

state, any instrumentality or agent of any other foreign state, or any 

other person, whether by cartel or any other association or form of 

cooperation or joint action—

(1) to limit the production or distribution of oil, natural 

gas, or any other petroleum product; 

(2) to set or maintain the price of oil, natural gas, or any 

petroleum product; or 

(3) to otherwise take any action in restraint of trade for oil, 

natural gas, or any petroleum product; 

when such action, combination, or collective action has a direct, 

substantial, and reasonably foreseeable effect on the market, supply, 

price, or distribution of oil, natural gas, or other petroleum product 

in the United States. 

(b) A foreign state engaged in conduct in violation of subsection 

(a) shall not be immune under the doctrine of sovereign immunity 

from the jurisdiction or judgments of the courts of the United States 

in any action brought to enforce this section. 

(c) No court of the United States shall decline, based on the act 

of state doctrine, to make a determination on the merits in an action 

brought under this section. 

(d) The Attorney General of the United States may bring an action to enforce this section in any district court of the United States 

as provided under the antitrust laws. 

* * * * * * * 

SECTION 1605 OF TITLE 28, UNITED STATES CODE 

§ 1605. General exceptions to the jurisdictional immunity of 

a foreign state 

(a) A foreign state shall not be immune from the jurisdiction 

of courts of the United States or of the states in any case—

(1) * * * 

* * * * * * * 

(6) in which the action is brought, either to enforce an 

agreement made by the foreign state with or for the benefit of 

a private party to submit to arbitration all or any differences 

which have arisen or which may arise between the parties with 

respect to a defined legal relationship, whether contractual or 

not, concerning a subject matter capable of settlement by arbitration under the laws of the United States, or to confirm an 

award made pursuant to such an agreement to arbitrate, if (A) 

the arbitration takes place or is intended to take place in the 

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1FEDERAL TRADE COMMISSION, THE PETROLEUM INDUSTRY: MERGERS, STRUCTURAL CHANGE, AND ANTITRUST ENFORCEMENT 5 (2004). 

United States, (B) the agreement or award is or may be governed by a treaty or other international agreement in force for 

the United States calling for the recognition and enforcement 

of arbitral awards, (C) the underlying claim, save for the agreement to arbitrate, could have been brought in a United States 

court under this section or section 1607, or (D) paragraph (1) 

of this subsection is otherwise applicable; øor¿ 

(7) Not otherwise covered by paragraph (2), in which 

money damages are sought against a foreign state for personal 

injury or death that was caused by an act of torture, 

extrajudicial killing, aircraft sabotage, hostage taking, or the 

provision of material support or resources (as defined in section 

2339a of title 18) for such an act if such act or provision of material support is engaged in by an official, employee, or agent 

of such foreign state while acting within the scope of his or her 

office, employment, or agency, except that the court shall decline to hear a claim under this paragraph— (A) * * * 

(B) Even if the foreign state is or was so designated, 

if— (i) * * * 

(ii) neither the claimant nor the victim was a national of the United States (as that term is defined in 

section 101(a)(22) of the Immigration and Nationality 

Act) when the act upon which the claim is based 

occurredø.¿; or 

(8) in which the action is brought under section 7A of the 

Sherman Act. 

* * * * * * * 

SUPPLEMENTAL VIEWS

The Organization of Petroleum Exporting Countries (OPEC) sits 

atop the world’s supply of oil. Founded in Baghdad in 1960, OPEC 

members’ national oil ministers meet regularly to discuss prices 

and set crude oil production quotas. OPEC’s member nations include Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Qatar, Indonesia, Libya, the United Arab Emirates, Algeria, and Nigeria. Together they control roughly 40% of world oil production, and about 

2⁄3 of the world’s proven oil reserves. The Federal Trade Commission has found that ‘‘OPEC . . . continues to have a significant influence on world crude oil prices, even though coordination among 

its members to reduce output is imperfect.’’ 1

Many of the OPEC regimes are either totalitarian or unstable 

states. Some are openly hostile to American interests. Few would 

seriously argue that the presence of such a cartel is beneficial to 

the United States. 

H.R. 2264, the ‘‘No Oil Producing and Exporting Cartels Act of 

2007 or ‘NOPEC,’ ’’ is an effort to end the collusive behavior of 

OPEC by subjecting it to U.S. antitrust laws. H.R. 2264 does this 

by amending the Sherman Antitrust Act (15 U.S.C. § 1 et seq.) to 

make it illegal for foreign countries to collude to restrain output or 

fix prices of oil, gas, or any petroleum product, and would give aumstockstill on PROD1PC66 with HEARING

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2 649 F.2d 1354 (9th Cir. 1981). 

thority to the U.S. Attorney General to enforce the provisions. The 

bill is a response to the Ninth Circuit’s decision in International 

Association of Machinists and Aerospace Workers v. OPEC, which 

held that the countries constituting OPEC could not be held liable 

for antitrust violations because of the act of state doctrine.2 As 

such, the bill explicitly eliminates the concepts of sovereign immunity and the act of state doctrine as OPEC’s defenses to an antitrust suit. 

H.R. 2264, while well intentioned, could have a litany of consequences for America, both at home and abroad. I have requested 

that GAO study the impact that the bill may have on U.S. foreign 

policy, our trade balances, and our ability to station troops in the 

Middle East. In addition, this bill could lead to a number of retaliatory actions by these foreign governments, including an oil embargo 

like the one that occurred in 1973 and the seizure of U.S. assets 

abroad. At my request, the GAO will study the likelihood of such 

retaliatory actions and their impact on the U.S. economy. Separate 

and apart from those concerns, the costs of enforcing a judgment 

against a foreign state-owned entity are unknown and might not be 

worth the effort. 

Finally, I would like to note the importance of regular order in 

the consideration of such important legislation. The Antitrust Task 

Force held one hearing on gas prices the day before the markup of 

this legislation. At that hearing, which was repeatedly interrupted 

by votes on the floor and other procedural anomalies, the legislation received scant attention. In fact, one of the witnesses observed 

that there was little that Congress could do to impact the price of 

gasoline in the short term. Given the potential wide-ranging impacts that this bill could have on the American economy and its extremely limited value in reducing the price of gasoline in the short 

term, I think it would have been wise to give it more thorough and 

deliberate consideration. 

LAMAR SMITH. 

Æ 

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