I
106TH CONGRESS
2D SESSION
H. R. 3822
To reduce, suspend, or terminate any assistance under the Foreign Assistance
Act of 1961 and the Arms Export Control Act to each country deter-
mined by the President to be engaged in oil price fixing to the detriment
of the United States economy, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 2, 2000
Mr. GILMAN introduced the following bill; which was referred to the
Committee on International Relations
A BILL
To reduce, suspend, or terminate any assistance under the
Foreign Assistance Act of 1961 and the Arms Export
Control Act to each country determined by the President
to be engaged in oil price fixing to the detriment of
the United States economy, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Oil Price Reduction
Act of 2000’’.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) Oil producing countries, including the na-
tions of the Organization of Petroleum Exporting
Countries (OPEC), took concerted actions in March
and September of 1999 to cut oil production and
hold back from the market 4,000,000 barrels a day
representing approximately six percent of the global
supply.
(2) OPEC, in its capacity as an oil cartel, has
been a critical factor in driving prices from approxi-
mately $11 a barrel in December 1998 to a high of
$30 a barrel in mid-February 2000, levels not seen
since the Persian Gulf Conflict.
(3) On February 10, 2000, a hearing before the
Committee on International Relations of the House
of Representatives on ‘‘OPEC and the Northeast
Energy Crisis’’ clearly demonstrated that OPEC’s
goal of reducing its oil stocks was the major reason
behind price increases in heating oil, gasoline, and
diesel oil stocks.
(4) During this hearing, the Assistant Secretary
in the Office of International Affairs of the Depart-
ment of Energy noted that artificial supply con-
straints placed on the market are ultimately self-de-
feating in so far as they increase volatility in the
market, lead to boom and bust cycles, and promote
global instability, particularly in developing countries
whose economies are extremely vulnerable to sharp
price increases.
(5) These price increases have caused infla-
tionary shocks to the United States economy and
could threaten the global economic recovery now un-
derway in Europe and Asia where the demand for oil
is rising.
(6) The transportation infrastructure of the
United States is under stress and tens of thousands
of small- to medium-sized trucking firms throughout
the Northeast region are on the verge of bankruptcy
because of the rise in diesel oil prices to more than
$2 per gallon—a 43 percent increase in the Central
Atlantic region and a 55 percent increase in the
New England region—an increase that has had the
effect of requiring these trucking firms to use up to
20 percent of their operating budgets for the pur-
chase of diesel oil.
(7) Many elderly and retired Americans on
fixed incomes throughout the Northeast region of
the United States cannot afford to pay the pre-
vailing heating oil costs and all too often are faced
with the choice of paying the grocery bills or staying
warm.
(8) Several key oil producing nations relied on
the United States military for their protection in
1990 and 1991, including during the Persian Gulf
Conflict, and these nations still depend on the
United States for their security.
(9) Many of these nations enjoy a close eco-
nomic and security relationship with the United
States which is a fundamental underpinning of glob-
al security and cooperation.
(10) A continuation of the present policies put
in place at the meeting of OPEC Ministers in March
and September of 1999 threatens the relationship
that many of the OPEC nations enjoy with the
United States.
SEC. 3. POLICY OF THE UNITED STATES.
(a) POLICY WITH RESPECT
TO OIL EXPORTING
COUNTRIES.—It shall be the policy of the United States
that its political, economic, and security relations with
countries that are major net oil exporters will be deter-
mined to a great extent by whether such countries engage
in oil price fixing.
(b) POLICY WITH RESPECT
TO OIL IMPORTING
COUNTRIES.—It shall be the policy of the United States
to work multilaterally with other countries that are major
net oil importers to bring about the complete dismantle-
ment of international oil price fixing arrangements.
SEC. 4. REPORT TO CONGRESS.
Not later than 30 days after the date of enactment
of this Act, the President shall transmit to the Congress
a report that contains the following:
(1) A description of the overall economic and
security relationship between the United States and
each country that is a major net oil exporter, includ-
ing each country that is a member of OPEC.
(2) A description of the effect that coordination
among the countries described in paragraph (1) with
respect to oil production and pricing has had on the
United States economy and global energy supplies.
(3) Detailed information on any and all assist-
ance programs under the Foreign Assistance Act of
1961 and the Arms Export Control Act, including li-
censes for the export of defense articles and defense
services under section 38 of such Act, provided to
the countries described in paragraph (1).
(4) A determination made by the President in
accordance with section 5 for each country described
in paragraph (1).
SEC. 5. DETERMINATIONS BY THE PRESIDENT OF MAJOR
OIL EXPORTING COUNTRIES ENGAGED IN
PRICE FIXING.
The report submitted pursuant to section 4 shall
include—
(1) the determination of the President with re-
spect to each country described in section 4(1) as to
whether or not, as of the date on which the Presi-
dent makes the determination, that country is en-
gaged in oil price fixing to the detriment of the
United States economy; and
(2) a memorandum of justification with respect
to each determination submitted in accordance with
paragraph (1), including in the case of any deter-
mination that a country described in section 4(1) is
not engaged oil price fixing to the detriment of the
United States economy an explanation whether that
determination rests on a finding that the country is
not engaged in oil price fixing, or a finding that it
is engaged in oil price fixing but that price fixing is
not detrimental to the United States economy.
SEC. 6. REDUCTION, SUSPENSION, OR TERMINATION OF
UNITED STATES ASSISTANCE.
Not later than 10 days after the date on which the
President transmits to the Congress the report pursuant
to section 4, the President shall reduce, suspend, or termi-
nate assistance under the Foreign Assistance Act of 1961
and the Arms Export Control Act, including the license
for export of defense articles or defense services under sec-
tion 38 of such Act, to each country determined by the
President pursuant to section 5 to be engaged in oil price
fixing to the detriment of the United States economy.
SEC. 7. DIPLOMATIC EFFORTS.
(a) EFFORTS WITH RESPECT TO OIL EXPORTING
COUNTRIES.—It is the sense of the Congress that the
United States should continue to undertake a concerted
diplomatic campaign to convince all countries that are
major net oil exporters that the current oil price levels are
unsustainable and will negatively effect global economic
growth rates in oil consuming and developing countries.
(b) EFFORTS WITH RESPECT TO OIL IMPORTING
COUNTRIES.—It is the sense of Congress that the United
States should undertake a concerted diplomatic campaign
to convince other countries that are major net oil import-
ers to join in multilateral efforts to bring about the com-
plete dismantlement of international oil price fixing ar-
rangements.
(c) REPORT ON DIPLOMATIC EFFORTS.—Not later
than 90 days after the date of enactment of this Act, the
President shall transmit to the Congress a report describ-
ing the United States diplomatic efforts undertaken in ac-
cordance with subsections (a) and (b), and the results
achieved by those efforts.
SEC. 7. DEFINITIONS.
In this Act:
(1) OIL PRICE FIXING.—The term ‘‘oil price
fixing’’ means participation in any agreement, ar-
rangement, or understanding with other countries
that are oil exporters to increase the price of oil or
natural gas by means of, inter alia, limiting oil or
gas production or establishing minimum prices for
oil or gas.
(2) OPEC.—The term ‘‘OPEC’’ means the Or-
ganization of Petroleum Exporting Countries.
Æ