Committee Chairman Arlen Specter [R-PA] introduced the measure, which has bipartisan support among its sponsors. The bill has the following provisions:
Amendment to the Clayton Act
The bill amends the Clayton Act to make it "unlawful for any person to refuse to sell, or to export or divert, existing supplies of petroleum, gasoline, or other fuel derived from petroleum, or natural gas with the primary intention of increasing prices or creating a shortage in a geographic market" [S. 2557].
In order to determine if a person has acted with the requisite intent to create a shortage, the bill instructs courts to consider whether:
1) the cost of acquiring, producing, refining, processing, marketing, selling, or otherwise making such products has increased; and
2) the price obtained from exporting or diverting existing supplies is greater than the price obtained where the existing supplies are located or intended to be shipped [S. 2557].
The bill instructs the Comptroller General, Attorney General, and Chairman of the FTC to perform industry-specific studies. First, the General Accounting Office (GAO) must study the effectiveness of divestitures required under certain prior oil and gas industry consent decrees to which the FTC or the DOJ was a party in the past 10 years. The GAO will report its findings to Congress, the FTC, and the DOJ.
Following the GAO's report, the Attorney General and the FTC Chairman must conduct studies on whether Section 7 of the Clayton Act, which prohibits certain mergers or acquisitions, should be amended "to modify how that section applies to persons engaged in the business of exploring for, producing, refining, or otherwise processing, storing, marketing, selling, or otherwise making available petroleum, gasoline or other fuels from petroleum, or natural gas" [S. 2557].
Joint Task Force
The bill directs the Attorney General and the FTC Chairman to establish a joint federal-state task force to investigate information sharing among persons in the oil and gas industry.
NOPEC & The Sherman Act
The bill also includes the No Oil Producing and Exporting Cartels Act of 2006 (NOPEC), which amends the Sherman Act to make it illegal for any foreign state or instrumentality to act collectively with any other foreign state or instrumentality to:
1) limit oil production or distribution;
2) set or maintain the price of oil; or
3) take any other action in restraint of trade for oil, natural gas, or any other petroleum product [S. 2557].
The Attorney General would have enforcement responsibilities of NOPEC. Additionally, NOPEC would remove both sovereign immunity and the act of state doctrine from the acts of OPEC and other nations.