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THE NEW YORK TIMES: Specter Mulls Plan to Rein in Big Oil, OPEC

Published: March 9, 2006
Filed at 6:54 p.m. ET
WASHINGTON (Reuters) – With the chiefs of big U.S. energy companies headed to Capitol Hill next week to discuss record profits, a key U.S. Republican senator is weighing a plan to discourage mergers and profiteering.
Senate Judiciary Committee Chairman Arlen Specter of Pennsylvania is drawing up legislation that would boost federal authority to block oil and gas mergers and prosecute companies that try to exacerbate supply shortages, according to a draft distributed by the committee on Thursday.
The “Petroleum Industry Antitrust Act of 2006'' would also allow the U.S. attorney general to sue oil producing cartels if they try to limit production or set prices — a provision aimed squarely at the Organization of Petroleum Exporting Countries.
Specter's draft “will be used as a basis for discussion and questioning'' at a March 14 Judiciary Committee hearing on the effect of oil and gas industry consolidation on energy prices, the committee said in a press release.
Among those expected to testify at the hearing are the chief executives of the two largest U.S. oil companies — Exxon Mobil Corp. and Chevron Corp. Executives from ConocoPhillips, Valero Energy Corp. and the U.S. units of BP Plc. and Royal Dutch Shell Plc. are also expected to attend, according to Capitol Hill sources.
Exxon drew much consumer outrage against gasoline prices after posting profit of more than $36 billion last year — the largest annual profit ever reported by a U.S company.
A November Senate hearing featuring U.S. oil and gas chief executives spawned lots of political rhetoric but little action. A push by some lawmakers from both parties to enact a windfall profits tax on oil companies failed to gain traction.
Specter's bill does not mention windfall profits.
Instead, it would make it unlawful for U.S. companies to export or divert supplies of crude oil, refined products and natural gas for the purpose of causing a shortage.
It also says no entity that buys or sells petroleum, petroleum products or natural gas in the United States can be acquired by another party “if the effect of such acquisition may be to appreciably diminish competition.''
The so-called “NOPEC'' section of the bill revives a plan that was dropped from wide-sweeping energy legislation signed into law last year.
The provisions are aimed at giving the U.S. executive branch the power to take action against OPEC, which pumps about a third of the world's crude oil.
Specter's bill would allow the U.S. attorney general to bring suit in any U.S. district court if foreign states act collectively to limit production, set prices or restrain supply.

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