To combat international oil price fixing.

HR 3822 EH

To combat international oil price fixing.

Be it enacted by the Senate and House of Representatives 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 nations 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 approximately $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 Department of Energy noted that artificial supply constraints placed on the market are ultimately self-defeating 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 inflationary shocks to the United States economy and could threaten the global economic recovery now underway 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 purchase 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 prevailing 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 economic and security relationship with the United States which is a fundamental underpinning of global 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 to consider the extent to which major net oil exporting countries engage in oil price fixing to be an important determinant in the overall political, economic, and security relationship between the United States and these countries.

(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 dismantlement of international oil price fixing arrangements.

SEC. 4. REPORT TO CONGRESS.

Not later than 30 days after the date of the 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, including 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 assistance programs under the Foreign Assistance Act of 1961 and the Arms Export Control Act, including licenses 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. DETERMINATION BY THE PRESIDENT OF MAJOR OIL EXPORTING COUNTRIES ENGAGED IN PRICE FIXING.

The report submitted pursuant to section 4 shall include the determination of the President with respect to each country described in section 4(1) as to whether or not, as of the date on which the President makes the determination, that country is engaged in oil price fixing to the detriment of the United States economy.

SEC. 6. DIPLOMATIC EFFORTS TO END PRICE FIXING.

(a) DIPLOMATIC EFFORTS- Not later than 30 days after the date on which the President transmits to the Congress the report pursuant to section 4, the President shall--

(1) undertake a concerted diplomatic campaign to convince any country determined by the President pursuant to section 5 to be engaged in oil price fixing to the detriment of the United States economy that the current oil price levels are unsustainable and will negatively effect global economic growth rates in oil consuming and developing countries; and

(2) take the necessary steps to begin negotiations to achieve multilateral action to reduce, suspend, or terminate bilateral assistance and arms exports to major net oil exporters engaged in oil price fixing as part of a concerted diplomatic campaign with other major net oil importers to bring about the complete dismantlement of international oil price fixing arrangements described in such report.

(b) REPORT ON DIPLOMATIC EFFORTS- Not later than 120 days after the date of the enactment of this Act, the President shall transmit to the Congress a report describing any diplomatic efforts undertaken in accordance with subsection (a) 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, arrangement, 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 Organization of Petroleum Exporting Countries.

Passed the House of Representatives March 22, 2000.

Attest:

Clerk.

END