S 2182 IS
106th CONGRESS
2d Session
S. 2182
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.
IN THE SENATE OF THE UNITED STATES
March 6, 2000
Mr. GRASSLEY introduced the following bill; which was read twice and referred
to the Committee on Foreign 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 Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
The 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 of 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 a 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 determined 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 dismantlement 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,
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. 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 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; and
(2) a memorandum of justification with respect to each determination
submitted in accordance with paragraph (1), including in the case of any
determination that a country described in section 4(1) is not engaged in 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 terminate 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 section 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 importers to join
in multilateral efforts to bring about the complete dismantlement of
international oil price fixing arrangements.
(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
describing the United States diplomatic efforts undertaken in accordance with
subsection (a) and (b), and the results achieved by those efforts.
SEC. 7. DEFINITIONS.
(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.
END