22 May 2008

Congressional Technique: Sue OPEC

This seems a very odd move to me. House members voted 324 to 84 to “[allow] the Justice Department to sue OPEC members for limiting oil supplies and working together to set crude prices” according to Reuters. The law, which faces a veto, would have OPEC play by US domestic anti-trust laws. In a show of naiveté that could only come from someone who believes words on paper will solve any and all problems, Representative Steve Kagen, who sponsored the bill, said:

“This bill guarantees that oil prices will reflect supply and demand economic rules, instead of wildly speculative and perhaps illegal activities.” (emphasis mine)

There are two problems (at least) with this approach. First, it supposes that legislative action within the US will cause a drop in international oil prices. It can be deduced that, in Rep. Kagen’s view, bringing an international cartel under US law will spur change within that cartel. The law, after all, is the ultimate arbiter of fair play and is respected universally. Congressional supporters of the bill must believe that OPEC won’t see this is a direct conflict of national interests between member-states and the US. But this is precisely – and rightly – the reasoning for a presidential veto of the bill. According to the Reuters article, the White House firmly believes that the law will actually cause “retaliatory action” from OPEC members.

Somehow, I can foresee that when OPEC retaliates– thus causing gas prices to raise ever higher – the US will blame President Bush once again for not using his cozy relationship with the Saudis, in particular, to raise production rates.

Second, the bill seeks to force an international entity to do what Representatives – and many Americans – are reluctant to do themselves: participate in serious conservation. While US consumption dropped nearly 2% in the first quarter of this year, more conservation and domestic production are needed.

But it appears that asking Congress to create a bill that supports long-term US goals, does not pander to special interests, and isn’t full of pet pork is asking too much.

What should be obvious is that the US – neither its president nor its representatives – cannot control the oil producing countries of OPEC. That will not change with this silly anti-trust law. What our elected officials seem to have lost sight of is that solutions for domestic issues, like how to satisfy energy needs without knee-capping the economy, are best found at home. More domestic production, more personal conservation, and less dependence on OPEC are a start toward long-term energy policy. Creating a legal framework to blame others for high oil prices will do, I predict, nothing good. But it will make some Congressmen feel better, feel more secure, as they head into November. After that…well, I suppose that’s an issue for the next election cycle.

3 comments:

jack n said...

Their ignorant grandstanding is an insult and only serves to confirm their stupidity.

chan said...

You know the cool thing about all this attempt at government interference with the oil industry?

We'll get to experience gas lines again! I was to young to remember or experience them but now I'll have my chance! Now I'll have so many tales to tell my descendants about the "Gas Lines 2008-2009." Won't that be great!

Bob M. said...

Jack - If only blatant stupidity were so easily recognized by the majority of the electorate...

Chan - I don't really remember it, either, nor do I care to experience it! At least we have some hope of where that might lead - a renewal of real conservative (or non-whacky foreign policy libertarian) policies and agendas.