II 

Calendar No. 743 

110TH CONGRESS 

2D SESSION S. 3044 

To provide energy price relief and hold oil companies and other entities 

accountable for their actions with regard to high energy prices, and 

for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 20, 2008 

Mr. REID (for himself, Mrs. BOXER, Mr. BROWN, Mr. CARDIN, Mr. CONRAD, 

Mr. DODD, Mr. DURBIN, Mr. JOHNSON, Mr. KENNEDY, Ms. 

KLOBUCHAR, Mr. KOHL, Mr. LAUTENBERG, Mr. LEAHY, Mr. LEVIN, 

Mrs. MCCASKILL, Ms. MIKULSKI, Mrs. MURRAY, Mr. REED, Mr. SCHUMER, Ms. STABENOW, and Mr. WHITEHOUSE) introduced the following 

bill; which was read the first time 

MAY 21, 2008 

Read the second time and placed on the calendar 

A BILL 

To provide energy price relief and hold oil companies and 

other entities accountable for their actions with regard 

to high energy prices, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Consumer-First Energy Act of 2008’’. 

4 (b) TABLE OF CONTENTS.—The table of contents of 

5 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Findings. 

TITLE I—TAX PROVISIONS RELATED TO OIL AND GAS 

Sec. 101. Denial of deduction for major integrated oil companies for income attributable to domestic production of oil, gas, or primary products thereof. 

Sec. 102. Elimination of the different treatment of foreign oil and gas extraction income and foreign oil related income for purposes of the 

foreign tax credit. 

Sec. 103. Windfall profits tax. 

Sec. 104. Energy Independence and Security Trust Fund. 

TITLE II—PRICE GOUGING 

Sec. 201. Short title. 

Sec. 202. Definitions. 

Sec. 203. Energy emergency and additional price gouging enforcement. 

Sec. 204. Presidential declaration of energy emergency. 

Sec. 205. Enforcement by the Federal Trade Commission. 

Sec. 206. Enforcement by State attorneys general. 

Sec. 207. Penalties. 

Sec. 208. Effect on other laws. 

TITLE III—STRATEGIC PETROLEUM RESERVE 

Sec. 301. Suspension of petroleum acquisition for Strategic Petroleum Reserve. 

TITLE IV—NO OIL PRODUCING AND EXPORTING CARTELS 

Sec. 401. No Oil Producing and Exporting Cartels Act of 2008. 

TITLE V—MARKET SPECULATION 

Sec. 501. Speculative limits and transparency for off-shore oil trading. 

Sec. 502. Margin level for crude oil. 

6 SEC. 2. FINDINGS. 

7 Congress finds that— 

8 (1) excessive prices for petroleum products have 

9 created, or imminently threaten to create, severe 


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1 economic dislocations and hardships, including the 

2 loss of jobs, business failures, disruption of economic 

3 activity, curtailment of vital public services, and 

4 price increases throughout the economy; 

5 (2) those hardships and dislocations jeopardize 

6 the normal flow of commerce and constitute a na7 tional energy and economic crisis that is a threat to 

8 the public health, safety, and welfare of the United 

9 States; 

10 (3) consumers, workers, small businesses, and 

11 large businesses of the United States are particu12 larly vulnerable to those price increase due to the 

13 failure of the President to aggressively develop alter14 natives to petroleum and petroleum products and to 

15 promote efficiency and conservation; 

16 (4) reliable and affordable supplies of crude oil 

17 and products refined from crude oil (including gaso18 line, diesel fuel, heating oil, and jet fuel) are vital to 

19 the economic and national security of the United 

20 States given current energy infrastructure and tech21 nology; 

22 (5) the price of crude oil and products refined 

23 from crude oil (including gasoline, diesel fuel, heat24 ing oil, and jet fuel) have skyrocketed to record lev25 els and are continuing to rise; 


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1 (6) since 2001, oil prices have increased from 

2 $29 per barrel to levels near $120 per barrel and 

3 gasoline prices have more than doubled from $1.47 

4 per gallon to more than $3.50 per gallon; 

5 (7) the record prices for crude oil and products 

6 refined from crude oil (including gasoline, diesel 

7 fuel, heating oil, and jet fuel)— 

8 (A) are hurting millions of consumers, 

9 workers, small businesses, and large businesses 

10 of the United States, and threaten long-term 

11 damage to the economy and security of the 

12 United States; 

13 (B) are partially due to— 

14 (i) the declining value of the dollar 

15 and a widespread lack of confidence in the 

16 management of economic and foreign pol17 icy by the President; 

18 (ii) the accumulation of national debt 

19 and growing budget deficits under the 

20 failed economic policies of the President; 

21 and 

22 (iii) high levels of military expendi23 tures under the failed policies of the Presi24 dent in Iraq; and 


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1 (C) are no longer justified by traditional 

2 forces of supply and demand; 

3 (8) rampant speculation in the markets for 

4 crude oil and products refined from crude oil has 

5 magnified the price increases and market volatility 

6 resulting from those underlying causes of price in7 creases; and 

8 (9) Congress must take urgent action to protect 

9 consumers, workers, and businesses of the United 

10 States from rampant speculation in the energy mar11 kets and the price increases resulting from the failed 

12 domestic and foreign policies of the President. 

13 TITLE I—TAX PROVISIONS 

14 RELATED TO OIL AND GAS 

15 SEC. 101. DENIAL OF DEDUCTION FOR MAJOR INTEGRATED 

16 OIL COMPANIES FOR INCOME ATTRIBUTABLE 

17 TO DOMESTIC PRODUCTION OF OIL, GAS, OR 

18 PRIMARY PRODUCTS THEREOF. 

19 (a) IN GENERAL.—Subparagraph (B) of section 

20 199(c)(4) (relating to exceptions) is amended by striking 

21 ‘‘or’’ at the end of clause (ii), by striking the period at 

22 the end of clause (iii) and inserting ‘‘, or’’, and by insert23 ing after clause (iii) the following new clause: 

24 ‘‘(iv) in the case of any major inte25 grated oil company (as defined in section 


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1 167(h)(5)(B)), the production, refining, 

2 processing, transportation, or distribution 

3 of oil, gas, or any primary product thereof 

4 during any taxable year described in sec5 tion 167(h)(5)(B).’’. 

6 (b) PRIMARY PRODUCT.—Section 199(c)(4)(B) is 

7 amended by adding at the end the following flush sen8 tence: 

9 ‘‘For purposes of clause (iv), the term ‘primary 

10 product’ has the same meaning as when used in 

11 section 927(a)(2)(C), as in effect before its re12 peal.’’. 

13 (c) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to taxable years beginning after 

15 December 31, 2008. 

16 SEC. 102. ELIMINATION OF THE DIFFERENT TREATMENT 

17 OF FOREIGN OIL AND GAS EXTRACTION IN18 COME AND FOREIGN OIL RELATED INCOME 

19 FOR PURPOSES OF THE FOREIGN TAX CRED20 IT. 

21 (a) IN GENERAL.—Subsections (a) and (b) of section 

22 907 of the Internal Revenue Code of 1986 (relating to 

23 special rules in case of foreign oil and gas income) are 

24 amended to read as follows: 


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1 ‘‘(a) REDUCTION IN AMOUNT ALLOWED AS FOREIGN

2 TAX UNDER SECTION 901.—In applying section 901, the 

3 amount of any foreign oil and gas taxes paid or accrued 

4 (or deemed to have been paid) during the taxable year 

5 which would (but for this subsection) be taken into ac6 count for purposes of section 901 shall be reduced by the 

7 amount (if any) by which the amount of such taxes ex8 ceeds the product of— 

9 ‘‘(1) the amount of the combined foreign oil 

10 and gas income for the taxable year, 

11 ‘‘(2) multiplied by— 

12 ‘‘(A) in the case of a corporation, the per13 centage which is equal to the highest rate of tax 

14 specified under section 11(b), or 

15 ‘‘(B) in the case of an individual, a frac16 tion the numerator of which is the tax against 

17 which the credit under section 901(a) is taken 

18 and the denominator of which is the taxpayer’s 

19 entire taxable income. 

20 ‘‘(b) COMBINED FOREIGN OIL AND GAS INCOME; 

21 FOREIGN OIL AND GAS TAXES.—For purposes of this sec22 tion— 

23 ‘‘(1) COMBINED FOREIGN OIL AND GAS IN24 COME.—The term ‘combined foreign oil and gas inVerDate Aug 31 2005 04:16 May 22, 2008 Jkt 069200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S3044.PCS S3044

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1 come’ means, with respect to any taxable year, the 

2 sum of— 

3 ‘‘(A) foreign oil and gas extraction income, 

4 and 

5 ‘‘(B) foreign oil related income. 

6 ‘‘(2) FOREIGN OIL AND GAS TAXES.—The term 

7 ‘foreign oil and gas taxes’ means, with respect to 

8 any taxable year, the sum of— 

9 ‘‘(A) oil and gas extraction taxes, and 

10 ‘‘(B) any income, war profits, and excess 

11 profits taxes paid or accrued (or deemed to 

12 have been paid or accrued under section 902 or 

13 960) during the taxable year with respect to 

14 foreign oil related income (determined without 

15 regard to subsection (c)(4)) or loss which would 

16 be taken into account for purposes of section 

17 901 without regard to this section.’’. 

18 (b) RECAPTURE OF FOREIGN OIL AND GAS

19 LOSSES.—Paragraph (4) of section 907(c) of the Internal 

20 Revenue Code of 1986 (relating to recapture of foreign 

21 oil and gas extraction losses by recharacterizing later ex22 traction income) is amended to read as follows: 

23 ‘‘(4) RECAPTURE OF FOREIGN OIL AND GAS

24 LOSSES BY RECHARACTERIZING LATER COMBINED

25 FOREIGN OIL AND GAS INCOME.— 


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1 ‘‘(A) IN GENERAL.—The combined foreign 

2 oil and gas income of a taxpayer for a taxable 

3 year (determined without regard to this para4 graph) shall be reduced— 

5 ‘‘(i) first by the amount determined 

6 under subparagraph (B), and 

7 ‘‘(ii) then by the amount determined 

8 under subparagraph (C). 

9 The aggregate amount of such reductions shall 

10 be treated as income (from sources without the 

11 United States) which is not combined foreign 

12 oil and gas income. 

13 ‘‘(B) REDUCTION FOR PRE-2008 FOREIGN

14 OIL EXTRACTION LOSSES.—The reduction 

15 under this paragraph shall be equal to the less16 er of— 

17 ‘‘(i) the foreign oil and gas extraction 

18 income of the taxpayer for the taxable year 

19 (determined without regard to this para20 graph), or 

21 ‘‘(ii) the excess of— 

22 ‘‘(I) the aggregate amount of for23 eign oil extraction losses for preceding 

24 taxable years beginning after DecemVerDate Aug 31 2005 04:16 May 22, 2008 Jkt 069200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S3044.PCS S3044

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1 ber 31, 1982, and before January 1, 

2 2008, over 

3 ‘‘(II) so much of such aggregate 

4 amount as was recharacterized under 

5 this paragraph (as in effect before 

6 and after the date of the enactment of 

7 the Consumer-First Energy Act of 

8 2008) for preceding taxable years be9 ginning after December 31, 1982. 

10 ‘‘(C) REDUCTION FOR POST-2008 FOREIGN

11 OIL AND GAS LOSSES.—The reduction under 

12 this paragraph shall be equal to the lesser of— 

13 ‘‘(i) the combined foreign oil and gas 

14 income of the taxpayer for the taxable year 

15 (determined without regard to this para16 graph), reduced by an amount equal to the 

17 reduction under subparagraph (A) for the 

18 taxable year, or 

19 ‘‘(ii) the excess of— 

20 ‘‘(I) the aggregate amount of for21 eign oil and gas losses for preceding 

22 taxable years beginning after Decem23 ber 31, 2008, over 

24 ‘‘(II) so much of such aggregate 

25 amount as was recharacterized under 


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1 this paragraph for preceding taxable 

2 years beginning after December 31, 

3 2008. 

4 ‘‘(D) FOREIGN OIL AND GAS LOSS DE5 FINED.— 

6 ‘‘(i) IN GENERAL.—For purposes of 

7 this paragraph, the term ‘foreign oil and 

8 gas loss’ means the amount by which— 

9 ‘‘(I) the gross income for the tax10 able year from sources without the 

11 United States and its possessions 

12 (whether or not the taxpayer chooses 

13 the benefits of this subpart for such 

14 taxable year) taken into account in 

15 determining the combined foreign oil 

16 and gas income for such year, is ex17 ceeded by 

18 ‘‘(II) the sum of the deductions 

19 properly apportioned or allocated 

20 thereto. 

21 ‘‘(ii) NET OPERATING LOSS DEDUC22 TION NOT TAKEN INTO ACCOUNT.—For 

23 purposes of clause (i), the net operating 

24 loss deduction allowable for the taxable 


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1 year under section 172(a) shall not be 

2 taken into account. 

3 ‘‘(iii) EXPROPRIATION AND CASUALTY

4 LOSSES NOT TAKEN INTO ACCOUNT.—For 

5 purposes of clause (i), there shall not be 

6 taken into account— 

7 ‘‘(I) any foreign expropriation 

8 loss (as defined in section 172(h) (as 

9 in effect on the day before the date of 

10 the enactment of the Revenue Rec11 onciliation Act of 1990)) for the tax12 able year, or 

13 ‘‘(II) any loss for the taxable 

14 year which arises from fire, storm, 

15 shipwreck, or other casualty, or from 

16 theft, 

17 to the extent such loss is not compensated 

18 for by insurance or otherwise. 

19 ‘‘(iv) FOREIGN OIL EXTRACTION

20 LOSS.—For purposes of subparagraph 

21 (B)(ii)(I), foreign oil extraction losses shall 

22 be determined under this paragraph as in 

23 effect on the day before the date of the en24 actment of the Consumer-First Energy Act 

25 of 2008.’’. 


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1 (c) CARRYBACK AND CARRYOVER OF DISALLOWED

2 CREDITS.—Section 907(f) of the Internal Revenue Code 

3 of 1986 (relating to carryback and carryover of disallowed 

4 credits) is amended— 

5 (1) by striking ‘‘oil and gas extraction taxes’’ 

6 each place it appears and inserting ‘‘foreign oil and 

7 gas taxes’’, and 

8 (2) by adding at the end the following new 

9 paragraph: 

10 ‘‘(4) TRANSITION RULES FOR PRE-2009 AND

11 2009 DISALLOWED CREDITS.— 

12 ‘‘(A) PRE-2009 CREDITS.—In the case of 

13 any unused credit year beginning before Janu14 ary 1, 2009, this subsection shall be applied to 

15 any unused oil and gas extraction taxes carried 

16 from such unused credit year to a year begin17 ning after December 31, 2008— 

18 ‘‘(i) by substituting ‘oil and gas ex19 traction taxes’ for ‘foreign oil and gas 

20 taxes’ each place it appears in paragraphs 

21 (1), (2), and (3), and 

22 ‘‘(ii) by computing, for purposes of 

23 paragraph (2)(A), the limitation under 

24 subparagraph (A) for the year to which 

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1 eign oil and gas extraction income’ for ‘for2 eign oil and gas income’ in subsection (a). 

3 ‘‘(B) 2009 CREDITS.—In the case of any 

4 unused credit year beginning in 2009, the 

5 amendments made to this subsection by the 

6 Consumer-First Energy Act of 2008 shall be 

7 treated as being in effect for any preceding year 

8 beginning before January 1, 2009, solely for 

9 purposes of determining how much of the un10 used foreign oil and gas taxes for such unused 

11 credit year may be deemed paid or accrued in 

12 such preceding year.’’. 

13 (d) CONFORMING AMENDMENT.—Section 6501(i) of 

14 the Internal Revenue Code of 1986 is amended by striking 

15 ‘‘oil and gas extraction taxes’’ and inserting ‘‘foreign oil 

16 and gas taxes’’. 

17 (e) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to taxable years beginning after 

19 December 31, 2008. 

20 SEC. 103. WINDFALL PROFITS TAX. 

21 (a) IN GENERAL.—Subtitle E of the Internal Rev22 enue Code of 1986 (relating to alcohol, tobacco, and cer23 tain other excise taxes) is amended by adding at the end 

24 thereof the following new chapter: 


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1 ‘‘CHAPTER 56—WINDFALL PROFITS ON 

2 CRUDE OIL 

‘‘Sec. 5896. Imposition of tax. 

‘‘Sec. 5897. Windfall profit; qualified investment. 

‘‘Sec. 5898. Special rules and definitions. 

3 ‘‘SEC. 5896. IMPOSITION OF TAX. 

4 ‘‘(a) IN GENERAL.—In addition to any other tax im5 posed under this title, there is hereby imposed on any ap6 plicable taxpayer an excise tax in an amount equal to 25 

7 percent of the excess of— 

8 ‘‘(1) the windfall profit of such taxpayer, over 

9 ‘‘(2) the excess of— 

10 ‘‘(A) the amount of the qualified invest11 ments of such applicable taxpayer for such tax12 able year, over 

13 ‘‘(B) the average of the qualified invest14 ment of such applicable taxpayer for taxable 

15 years beginning during the 2002–2006 taxable 

16 year period. 

17 ‘‘(b) APPLICABLE TAXPAYER.—For purposes of this 

18 chapter, the term ‘applicable taxpayer’ means any major 

19 integrated oil company (as defined in section 

20 167(h)(5)(B)). 

21 ‘‘SEC. 5897. WINDFALL PROFIT; QUALIFIED INVESTMENT. 

22 ‘‘(a) GENERAL RULE.—For purposes of this chapter, 

23 the term ‘windfall profit’ means the excess of the adjusted 

24 taxable income of the applicable taxpayer for the taxable 


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1 year over the reasonably inflated average profit for such 

2 taxable year. 

3 ‘‘(b) ADJUSTED TAXABLE INCOME.—For purposes of 

4 this chapter, with respect to any applicable taxpayer, the 

5 adjusted taxable income for any taxable year is equal to 

6 the taxable income for such taxable year (within the mean7 ing of section 63 and determined without regard to this 

8 subsection)— 

9 ‘‘(1) increased by any interest expense deduc10 tion, charitable contribution deduction, and any net 

11 operating loss deduction carried forward from any 

12 prior taxable year, and 

13 ‘‘(2) reduced by any interest income, dividend 

14 income, and net operating losses to the extent such 

15 losses exceed taxable income for the taxable year. 

16 In the case of any applicable taxpayer which is a foreign 

17 corporation, the adjusted taxable income shall be deter18 mined with respect to such income which is effectively con19 nected with the conduct of a trade or business in the 

20 United States. 

21 ‘‘(c) REASONABLY INFLATED AVERAGE PROFIT.— 

22 For purposes of this chapter, with respect to any applica23 ble taxpayer, the reasonably inflated average profit for any 

24 taxable year is an amount equal to the average of the ad25 justed taxable income of such taxpayer for taxable years 


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1 beginning during the 2002–2006 taxable year period (de2 termined without regard to the taxable year with the high3 est adjusted taxable income in such period) plus 10 per4 cent of such average. 

5 ‘‘(d) QUALIFIED INVESTMENT.—For purposes of this 

6 chapter, the term ‘qualified investment’ means, with re7 spect to any applicable taxpayer, means any amount paid 

8 or incurred with respect to— 

9 ‘‘(1) any qualified facility described in para10 graph (1), (2), (3), (4), (5), (6), (7), or (9) of sec11 tion 45(d) (determined without regard to any placed 

12 in service date), or 

13 ‘‘(2) any facility for the production renewable 

14 fuel or advanced biofuel (as defined in section 

15 211(o) of the Clean Air Act 942 U.S.C. 7545). 

16 ‘‘SEC. 5898. SPECIAL RULES AND DEFINITIONS. 

17 ‘‘(a) WITHHOLDING AND DEPOSIT OF TAX.—The 

18 Secretary shall provide such rules as are necessary for the 

19 withholding and deposit of the tax imposed under section 

20 5896. 

21 ‘‘(b) RECORDS AND INFORMATION.—Each taxpayer 

22 liable for tax under section 5896 shall keep such records, 

23 make such returns, and furnish such information as the 

24 Secretary may by regulations prescribe. 


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1 ‘‘(c) RETURN OF WINDFALL PROFIT TAX.—The Sec2 retary shall provide for the filing and the time of such 

3 filing of the return of the tax imposed under section 5896. 

4 ‘‘(d) CRUDE OIL.—The term ‘crude oil’ includes 

5 crude oil condensates and natural gasoline. 

6 ‘‘(e) BUSINESSES UNDER COMMON CONTROL.—For 

7 purposes of this chapter, all members of the same con8 trolled group of corporations (within the meaning of sec9 tion 267(f)) and all persons under common control (within 

10 the meaning of section 52(b) but determined by treating 

11 an interest of more than 50 percent as a controlling inter12 est) shall be treated as 1 person. 

13 ‘‘(f) REGULATIONS.—The Secretary shall prescribe 

14 such regulations as may be necessary or appropriate to 

15 carry out the purposes of this chapter.’’. 

16 (b) CLERICAL AMENDMENT.—The table of chapters 

17 for subtitle E of the Internal Revenue Code of 1986 is 

18 amended by adding at the end the following new item: 

‘‘CHAPTER 56. WINDFALL PROFIT ON CRUDE OIL.’’. 

19 (c) DEDUCTIBILITY OF WINDFALL PROFIT TAX.— 

20 The first sentence of section 164(a) of the Internal Rev21 enue Code of 1986 (relating to deduction for taxes) is 

22 amended by inserting after paragraph (5) the following 

23 new paragraph: 

24 ‘‘(6) The windfall profit tax imposed by section 

25 5896.’’. 


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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2007. 

4 SEC. 104. ENERGY INDEPENDENCE AND SECURITY TRUST 

5 FUND. 

6 (a) ESTABLISHMENT.—Subchapter A of chapter 98 

7 of the Internal Revenue Code of 1986 (relating to trust 

8 fund code) is amended by adding at the end the following 

9 new section: 

10 ‘‘SEC. 9511. ENERGY INDEPENDENCE AND SECURITY TRUST 

11 FUND. 

12 ‘‘(a) CREATION OF TRUST FUND.—There is estab13 lished in the Treasury of the United States a trust fund 

14 to be known as ‘Energy Independence and Security Trust 

15 Fund’ (referred to in this section as the ‘Trust Fund’), 

16 consisting of such amounts as may be appropriated or 

17 credited to the Trust Fund as provided in this section or 

18 section 9602(b). 

19 ‘‘(b) TRANSFERS TO TRUST FUND.—There is hereby 

20 appropriated to the Trust Fund an amount equivalent to 

21 the increase in the revenues received in the Treasury as 

22 the result of the amendments made by sections 101, 102, 

23 and 103 of the Consumer-First Energy Act of 2008. 

24 ‘‘(c) DISTRIBUTION OF AMOUNTS IN TRUST FUND.— 

25 Amounts in the Trust Fund shall be available, as provided 


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1 by appropriation Acts, for the purposes of reducing the 

2 dependence of the United States on foreign and 

3 unsustainable energy sources and reducing the risks of 

4 global warming through programs and measures that— 

5 ‘‘(1) reduce the burdens on consumers of rising 

6 energy prices; 

7 ‘‘(2) diversify and expand the use of secure, ef8 ficient, and environmentally-friendly energy supplies 

9 and technologies; 

10 ‘‘(3) result in net reductions in emissions of 

11 greenhouse gases; and 

12 ‘‘(4) prevent energy price gouging, profiteering, 

13 and market manipulation.’’. 

14 (b) CLERICAL AMENDMENT.—The table of sections 

15 for subchapter A of chapter 98 of such Code is amended 

16 by adding at the end the following new item: 

‘‘Sec. 9511. Energy Independence and Security Trust Fund.’’. 

17 (c) EFFECTIVE DATE.—The amendments made by 

18 this section shall take effect on the date of the enactment 

19 of this Act. 

20 TITLE II—PRICE GOUGING 

21 SEC. 201. SHORT TITLE. 

22 This title may be cited as the ‘‘Petroleum Consumer 

23 Price Gouging Protection Act’’. 

24 SEC. 202. DEFINITIONS. 

25 In this title: 


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1 (1) AFFECTED AREA.—The term ‘‘affected 

2 area’’ means an area covered by a Presidential dec3 laration of energy emergency. 

4 (2) SUPPLIER.—The term ‘‘supplier’’ means 

5 any person engaged in the trade or business of sell6 ing or reselling, at retail or wholesale, or distributing 

7 crude oil, gasoline, petroleum distillates, or biofuel. 

8 (3) PRICE GOUGING.—The term ‘‘price 

9 gouging’’ means the charging of an unconscionably 

10 excessive price by a supplier in an affected area. 

11 (4) UNCONSCIONABLY EXCESSIVE PRICE.—The 

12 term ‘‘unconscionably excessive price’’ means an av13 erage price charged during an energy emergency de14 clared by the President in an area and for a product 

15 subject to the declaration, that— 

16 (A)(i)(I) constitutes a gross disparity from 

17 the average price at which it was offered for 

18 sale in the usual course of the supplier’s busi19 ness during the 30 days prior to the President’s 

20 declaration of an energy emergency; and 

21 (II) grossly exceeds the prices at which the 

22 same or similar crude oil, gasoline, petroleum 

23 distillates, or biofuel was readily obtainable by 

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1 evant geographic market within the affected 

2 area; or 

3 (ii) represents an exercise of unfair lever4 age or unconscionable means on the part of the 

5 supplier, during a period of declared energy 

6 emergency; and 

7 (B) is not attributable to increased whole8 sale or operational costs, including replacement 

9 costs, outside the control of the supplier, in10 curred in connection with the sale of crude oil, 

11 gasoline, petroleum distillates, or biofuel, and is 

12 not attributable to local, regional, national, or 

13 international market conditions. 

14 (5) COMMISSION.—The term ‘‘Commission’’ 

15 means the Federal Trade Commission. 

16 SEC. 203. ENERGY EMERGENCY AND ADDITIONAL PRICE 

17 GOUGING ENFORCEMENT. 

18 (a) IN GENERAL.—During any energy emergency de19 clared by the President under section 204 of this title, it 

20 is unlawful for any supplier to sell, or offer to sell crude 

21 oil, gasoline, petroleum distillates, or biofuel subject to 

22 that declaration in, or for use in, the area to which that 

23 declaration applies at an unconscionably excessive price. 


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1 (b) FACTORS CONSIDERED.—In determining whether 

2 a violation of subsection (a) has occurred, there shall be 

3 taken into account, among other factors, whether— 

4 (1) the price charged was a price that would 

5 reasonably exist in a competitive and freely func6 tioning market; and 

7 (2) the amount of gasoline, other petroleum dis8 tillates, or biofuel the seller produced, distributed, or 

9 sold during the period the Proclamation was in ef10 fect increased over the average amount during the 

11 preceding 30 days. 

12 SEC. 204. PRESIDENTIAL DECLARATION OF ENERGY EMER13 GENCY. 

14 (a) IN GENERAL.—If the President finds that the 

15 health, safety, welfare, or economic well-being of the citi16 zens of the United States is at risk because of a shortage 

17 or imminent shortage of adequate supplies of crude oil, 

18 gasoline, petroleum distillates, or biofuel due to a disrup19 tion in the national distribution system for crude oil, gaso20 line, petroleum distillates, or biofuel (including such a 

21 shortage related to a major disaster (as defined in section 

22 102(2) of the Robert T. Stafford Disaster Relief and 

23 Emergency Assistance Act (42 U.S.C. 5122(2)))), or sig24 nificant pricing anomalies in national energy markets for 

25 crude oil, gasoline, petroleum distillates, or biofuel the 


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1 President may declare that a Federal energy emergency 

2 exists. 

3 (b) SCOPE AND DURATION.—The emergency declara4 tion shall specify— 

5 (1) the period, not to exceed 30 days, for which 

6 the declaration applies; 

7 (2) the circumstance or condition necessitating 

8 the declaration; 

9 (3) the area or region to which it applies which 

10 may not be limited to a single State; and 

11 (4) the product or products to which it applies. 

12 (c) EXTENSIONS.—The President may— 

13 (1) extend a declaration under subsection (a) 

14 for a period of not more than 30 days; 

15 (2) extend such a declaration more than once; 

16 and 

17 (3) discontinue such a declaration before its ex18 piration. 

19 SEC. 205. ENFORCEMENT BY THE FEDERAL TRADE COM20 MISSION. 

21 (a) ENFORCEMENT.—This title shall be enforced by 

22 the Federal Trade Commission in the same manner, by 

23 the same means, and with the same jurisdiction as though 

24 all applicable terms of the Federal Trade Commission Act 

25 were incorporated into and made a part of this title. In 


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1 enforcing section 203 of this title, the Commission shall 

2 give priority to enforcement actions concerning companies 

3 with total United States wholesale or retail sales of crude 

4 oil, gasoline, petroleum distillates, and biofuel in excess 

5 of $500,000,000 per year but shall not exclude enforce6 ment actions against companies with total United States 

7 wholesale sales of $500,000,000 or less per year. 

8 (b) VIOLATION IS TREATED AS UNFAIR OR DECEP9 TIVE ACT OR PRACTICE.—The violation of any provision 

10 of this title shall be treated as an unfair or deceptive act 

11 or practice proscribed under a rule issued under section 

12 18(a)(1)(B) of the Federal Trade Commission Act (15 

13 U.S.C. 57a(a)(1)(B)). 

14 (c) COMMISSION ACTIONS.—Following the declara15 tion of an energy emergency by the President under sec16 tion 204 of this title, the Commission shall— 

17 (1) maintain within the Commission— 

18 (A) a toll-free hotline that a consumer may 

19 call to report an incident of price gouging in the 

20 affected area; and 

21 (B) a program to develop and distribute to 

22 the public informational materials to assist resi23 dents of the affected area in detecting, avoid24 ing, and reporting price gouging; 


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1 (2) consult with the Attorney General, the 

2 United States Attorney for the districts in which a 

3 disaster occurred (if the declaration is related to a 

4 major disaster), and State and local law enforcement 

5 officials to determine whether any supplier in the af6 fected area is charging or has charged an uncon7 scionably excessive price for crude oil, gasoline, pe8 troleum distillates, or biofuel in the affected area; 

9 and 

10 (3) conduct investigations as appropriate to de11 termine whether any supplier in the affected area 

12 has violated section 203 of this title, and upon such 

13 finding, take any action the Commission determines 

14 to be appropriate to remedy the violation. 

15 SEC. 206. ENFORCEMENT BY STATE ATTORNEYS GENERAL. 

16 (a) IN GENERAL.—A State, as parens patriae, may 

17 bring a civil action on behalf of its residents in an appro18 priate district court of the United States to enforce the 

19 provisions of section 203 of this title, or to impose the 

20 civil penalties authorized by section 207 for violations of 

21 section 203, whenever the attorney general of the State 

22 has reason to believe that the interests of the residents 

23 of the State have been or are being threatened or adversely 

24 affected by a supplier engaged in the sale or resale, at 

25 retail or wholesale, or distribution of crude oil, gasoline, 


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1 petroleum distillates, or biofuel in violation of section 203 

2 of this title. 

3 (b) NOTICE.—The State shall serve written notice to 

4 the Commission of any civil action under subsection (a) 

5 prior to initiating the action. The notice shall include a 

6 copy of the complaint to be filed to initiate the civil action, 

7 except that if it is not feasible for the State to provide 

8 such prior notice, the State shall provide such notice im9 mediately upon instituting the civil action. 

10 (c) AUTHORITY TO INTERVENE.—Upon receiving the 

11 notice required by subsection (b), the Commission may in12 tervene in the civil action and, upon intervening— 

13 (1) may be heard on all matters arising in such 

14 civil action; and 

15 (2) may file petitions for appeal of a decision in 

16 such civil action. 

17 (d) CONSTRUCTION.—For purposes of bringing any 

18 civil action under subsection (a), nothing in this section 

19 shall prevent the attorney general of a State from exer20 cising the powers conferred on the Attorney General by 

21 the laws of such State to conduct investigations or to ad22 minister oaths or affirmations or to compel the attendance 

23 of witnesses or the production of documentary and other 

24 evidence. 


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1 (e) VENUE; SERVICE OF PROCESS.—In a civil action 

2 brought under subsection (a)— 

3 (1) the venue shall be a judicial district in 

4 which— 

5 (A) the defendant operates; 

6 (B) the defendant was authorized to do 

7 business; or 

8 (C) where the defendant in the civil action 

9 is found; 

10 (2) process may be served without regard to the 

11 territorial limits of the district or of the State in 

12 which the civil action is instituted; and 

13 (3) a person who participated with the defend14 ant in an alleged violation that is being litigated in 

15 the civil action may be joined in the civil action with16 out regard to the residence of the person. 

17 (f) LIMITATION ON STATE ACTION WHILE FEDERAL

18 ACTION IS PENDING.—If the Commission has instituted 

19 a civil action or an administrative action for violation of 

20 this title, a State attorney general, or official or agency 

21 of a State, may not bring an action under this section 

22 during the pendency of that action against any defendant 

23 named in the complaint of the Commission or the other 

24 agency for any violation of this title alleged in the Com25 mission’s civil or administrative action. 


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1 (g) NO PREEMPTION.—Nothing contained in this 

2 section shall prohibit an authorized State official from pro3 ceeding in State court to enforce a civil or criminal statute 

4 of that State. 

5 SEC. 207. PENALTIES. 

6 (a) CIVIL PENALTY.— 

7 (1) IN GENERAL.—In addition to any penalty 

8 applicable under the Federal Trade Commission Act, 

9 any supplier— 

10 (A) that violates section 203 of this title is 

11 punishable by a civil penalty of not more than 

12 $1,000,000; and 

13 (B) that violates section 203 of this title is 

14 punishable by a civil penalty of— 

15 (i) not more than $500,000, in the 

16 case of an independent small business mar17 keter of gasoline (within the meaning of 

18 section 324(c) of the Clean Air Act (42 

19 U.S.C. 7625(c))); and 

20 (ii) not more than $5,000,000 in the 

21 case of any other supplier. 

22 (2) METHOD.—The penalties provided by para23 graph (1) shall be obtained in the same manner as 

24 civil penalties imposed under section 5 of the Fed25 eral Trade Commission Act (15 U.S.C. 45). 


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1 (3) MULTIPLE OFFENSES; MITIGATING FAC2 TORS.—In assessing the penalty provided by sub3 section (a)— 

4 (A) each day of a continuing violation shall 

5 be considered a separate violation; and 

6 (B) the court shall take into consideration, 

7 among other factors, the seriousness of the vio8 lation and the efforts of the person committing 

9 the violation to remedy the harm caused by the 

10 violation in a timely manner. 

11 (b) CRIMINAL PENALTY.—Violation of section 203 of 

12 this title is punishable by a fine of not more than 

13 $5,000,000, imprisonment for not more than 5 years, or 

14 both. 

15 SEC. 208. EFFECT ON OTHER LAWS. 

16 (a) OTHER AUTHORITY OF THE COMMISSION.— 

17 Nothing in this title shall be construed to limit or affect 

18 in any way the Commission’s authority to bring enforce19 ment actions or take any other measure under the Federal 

20 Trade Commission Act (15 U.S.C. 41 et seq.) or any other 

21 provision of law. 

22 (b) STATE LAW.—Nothing in this title preempts any 

23 State law. 


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1 TITLE III—STRATEGIC 

2 PETROLEUM RESERVE 

3 SEC. 301. SUSPENSION OF PETROLEUM ACQUISITION FOR 

4 STRATEGIC PETROLEUM RESERVE. 

5 (a) IN GENERAL.—Except as provided in subsection 

6 (b) and notwithstanding any other provision of law, during 

7 the period beginning on the date of enactment of this Act 

8 and ending on December 31, 2008— 

9 (1) the Secretary of the Interior shall suspend 

10 acquisition of petroleum for the Strategic Petroleum 

11 Reserve through the royalty-in-kind program; and 

12 (2) the Secretary of Energy shall suspend ac13 quisition of petroleum for the Strategic Petroleum 

14 Reserve through any other acquisition method. 

15 (b) RESUMPTION.—Not earlier than 30 days after 

16 the date on which the President notifies Congress that the 

17 President has determined that the weighted average price 

18 of petroleum in the United States for the most recent 90- 

19 day period is $75 or less per barrel— 

20 (1) the Secretary of the Interior may resume 

21 acquisition of petroleum for the Strategic Petroleum 

22 Reserve through the royalty-in-kind program; and 

23 (2) the Secretary of Energy may resume acqui24 sition of petroleum for the Strategic Petroleum Re25 serve through any other acquisition method. 


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1 (c) EXISTING CONTRACTS.—In the case of any oil 

2 scheduled to be delivered to the Strategic Petroleum Re3 serve pursuant to a contract entered into by the Secretary 

4 of Energy prior to, and in effect on, the date of enactment 

5 of this Act, the Secretary shall, to the maximum extent 

6 practicable, negotiate a deferral of the delivery of the oil 

7 for a period of not less than 1 year, in accordance with 

8 procedures of the Department of Energy in effect on the 

9 date of enactment of this Act for deferrals of oil. 

10 TITLE IV—NO OIL PRODUCING 

11 AND EXPORTING CARTELS 

12 SEC. 401. NO OIL PRODUCING AND EXPORTING CARTELS 

13 ACT OF 2008. 

14 (a) SHORT TITLE.—This section may be cited as the 

15 ‘‘No Oil Producing and Exporting Cartels Act of 2008’’ 

16 or ‘‘NOPEC’’. 

17 (b) SHERMAN ACT.—The Sherman Act (15 U.S.C. 

18 1 et seq.) is amended by adding after section 7 the fol19 lowing: 

20 ‘‘SEC. 7A. OIL PRODUCING CARTELS. 

21 ‘‘(a) IN GENERAL.—It shall be illegal and a violation 

22 of this Act for any foreign state, or any instrumentality 

23 or agent of any foreign state, to act collectively or in com24 bination with any other foreign state, any instrumentality 

25 or agent of any other foreign state, or any other person, 


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1 whether by cartel or any other association or form of co2 operation or joint action— 

3 ‘‘(1) to limit the production or distribution of 

4 oil, natural gas, or any other petroleum product; 

5 ‘‘(2) to set or maintain the price of oil, natural 

6 gas, or any petroleum product; or 

7 ‘‘(3) to otherwise take any action in restraint of 

8 trade for oil, natural gas, or any petroleum product; 

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

10 direct, substantial, and reasonably foreseeable effect on 

11 the market, supply, price, or distribution of oil, natural 

12 gas, or other petroleum product in the United States. 

13 ‘‘(b) SOVEREIGN IMMUNITY.—A foreign state en14 gaged in conduct in violation of subsection (a) shall not 

15 be immune under the doctrine of sovereign immunity from 

16 the jurisdiction or judgments of the courts of the United 

17 States in any action brought to enforce this section. 

18 ‘‘(c) INAPPLICABILITY OF ACT OF STATE DOC19 TRINE.—No court of the United States shall decline, 

20 based on the act of state doctrine, to make a determina21 tion on the merits in an action brought under this section. 

22 ‘‘(d) ENFORCEMENT.—The Attorney General of the 

23 United States may bring an action to enforce this section 

24 in any district court of the United States as provided 

25 under the antitrust laws.’’. 


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1 (c) SOVEREIGN IMMUNITY.—Section 1605(a) of title 

2 28, United States Code, is amended— 

3 (1) in paragraph (6), by striking ‘‘or’’ after the 

4 semicolon; 

5 (2) in paragraph (7), by striking the period and 

6 inserting ‘‘; or’’; and 

7 (3) by adding at the end the following: 

8 ‘‘(8) in which the action is brought under sec9 tion 7A of the Sherman Act.’’. 

10 TITLE V—MARKET 

11 SPECULATION 

12 SEC. 501. SPECULATIVE LIMITS AND TRANSPARENCY FOR 

13 OFF-SHORE OIL TRADING. 

14 Section 4 of the Commodity Exchange Act (7 U.S.C. 

15 6) is amended by adding at the end the following: 

16 ‘‘(e) FOREIGN BOARDS OF TRADE.— 

17 ‘‘(1) IN GENERAL.—In the case of any foreign 

18 board of trade for which the Commission has grant19 ed or is considering an application to grant a board 

20 of trade located outside of the United States relief 

21 from the requirement of subsection (a) to become a 

22 designated contract market, derivatives transaction 

23 execution facility, or other registered entity, with re24 spect to an energy commodity that is physically de25 livered in the United States, prior to continuing to 


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1 or initially granting the relief, the Commission shall 

2 determine that the foreign board of trade— 

3 ‘‘(A) applies comparable principles or re4 quirements regarding the daily publication of 

5 trading information and position limits or ac6 countability levels for speculators as apply to a 

7 designated contract market, derivatives trans8 action execution facility, or other registered en9 tity trading energy commodities physically deliv10 ered in the United States; and 

11 ‘‘(B) provides such information to the 

12 Commission regarding the extent of speculative 

13 and nonspeculative trading in the energy com14 modity that is comparable to the information 

15 the Commission determines necessary to publish 

16 a Commitment of Traders report for a des17 ignated contract market, derivatives transaction 

18 execution facility, or other registered entity 

19 trading energy commodities physically delivered 

20 in the United States. 

21 ‘‘(2) EXISTING FOREIGN BOARDS OF TRADE.— 

22 During the period beginning 1 year after the date of 

23 enactment of this subsection and ending 18 months 

24 after the date of enactment of this subsection, the 

25 Commission shall determine whether to continue to 


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1 grant relief in accordance with paragraph (1) to any 

2 foreign board of trade for which the Commission 

3 granted relief prior to the date of enactment of this 

4 subsection.’’. 

5 SEC. 502. MARGIN LEVEL FOR CRUDE OIL. 

6 (a) IN GENERAL.—Section 2(a)(1) of the Commodity 

7 Exchange Act (7 U.S.C. 2(a)(1)) is amended by adding 

8 at the end the following: 

9 ‘‘(G) MARGIN LEVEL FOR CRUDE OIL.— 

10 Not later than 90 days after the date of enact11 ment of this subparagraph, the Commission 

12 shall promulgate regulations to set a substantial 

13 increase in margin levels for crude oil traded on 

14 any trading facility or as part of any agree15 ment, contract, or transaction covered by this 

16 Act in order to reduce excessive speculation and 

17 protect consumers.’’. 

18 (b) STUDIES.— 

19 (1) STUDY RELATING TO EFFECT OF CERTAIN

20 REGULATIONS.—Not later than 1 year after the date 

21 of enactment of this Act, the Commodity Futures 

22 Trading Commission shall submit to the appropriate 

23 committees of Congress a report describing the ef24 fect of the amendment made by subsection (a) on 

25 any trading facilities and agreements, contracts, and 


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1 transactions covered by the Commodity Exchange 

2 Act (7 U.S.C. 1 et seq.). 

3 (2) STUDY RELATING TO EFFECTS OF CHANGES

4 IN MARGIN LEVELS.—Not later than 180 days after 

5 the date of enactment of this Act, the Comptroller 

6 General of the United States shall submit to the ap7 propriate committees of Congress a report describing 

8 the effect (including any effect relating to trade vol9 ume or volatility) of any change of a margin level 

10 that occurred during the 10-year period ending on 

11 the date of enactment of this Act. 


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Calendar No. 743 

110TH CONGRESS 

2D SESSION S. 3044 

A BILL 

To provide energy price relief and hold oil compaother purposes. tions with regard to high energy prices, and for nies and other entities accountable for their acMAY 21, 2008 

Read the second time and placed on the calendar 


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