- The Washington Times - Tuesday, May 22, 2007

ASSOCIATED PRESS

The House voted yesterday to allow the government to sue OPEC over oil production quotas.

The White House objected, saying that might disrupt supplies and lead to even higher costs at the pump. The Organization of Petroleum Exporting Countries is the cartel that accounts for 40 percent of the world’s oil production.

“We don’t have to stand by and watch OPEC dictate the price of gas,” Judiciary Committee Chairman John Conyers Jr., Michigan Democrat, the bill’s chief sponsor, declared, reflecting the frustration lawmakers have felt over their inability to address people’s worries about high summer fuel costs.

The measure passed 345-72. A similar bill awaits action in the Senate.

Separately at a House hearing, lawmakers were told that crude oil prices have played a relatively minor role in the sharp increase in gasoline costs over the last three months, putting the blame on lower gasoline imports, refinery outages and continuing growth in demand from motorists.

Gasoline prices “may ease somewhat,” Guy Caruso, chief of the Energy Department’s statistical agency, told the House Energy and Commerce investigations subcommittee. But he said pressure on gas prices will remain strong “with the hurricane season approaching, continued tight refinery conditions, low gas inventories and increased demand for summer travel.”

Nevertheless, the House felt it was important to take on OPEC, the major player in oil production. Member states of OPEC late last year cut production by 1.1 million barrels a day to counter what had been a buildup of world oil stocks.

Mr. Conyers accused OPEC engaging in a “price fixing conspiracy” that has “unfairly driven up the price” of crude oil and, in turn, gasoline.

His measure would change antitrust laws so that the Justice Department can sue OPEC member countries for price-fixing, and would remove the immunity given a sovereign state against such lawsuits.

But the White House said such suits could spawn retaliatory measures by oil-producing countries and “lead to oil supply disruptions and an escalation in the price of gasoline, natural gas, home heating oil.”

The administration urged “diplomatic efforts … rather than lawsuits in U.S. courts” to address global oil production. The White House said President Bush would be advised to veto the measure if Congress passed it.

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