OPEC Head Warns U.S. Lawmakers On Anti-OPEC Bill

OPEC head warns U.S. lawmakers on anti-OPEC bill

http://www.reuters.com/article/ousiv...76518120070627

By Randy Fabi
6/27/2007

ISTANBUL (Reuters) - OPEC President Mohammed al-Hamli warned U.S. lawmakers on Wednesday they were taking a "really dangerous step" in seeking legislation to sue the oil group.

The U.S. Senate last week approved a plan that would enable the federal government to take legal action against OPEC for price manipulation, but the White House has threatened to veto the measure.

"It's a really dangerous step. We are in the process of fighting that," Hamli said at an oil conference in Turkey.

He said OPEC had successfully fought off two prior attempts by Washington against the 12-member grouping, saying decisions taken by the group were non-binding.

The current bill, sponsored by Democrat Herb Kohl of Wisconsin and Republican Arlen Specter of Pennsylvania, would revoke the sovereign immunity members of the Organization of the Petroleum Exporting Countries enjoy from U.S. legal action.

The measure, which has gathered support due to high gasoline pump prices of around $3 a gallon in the United States, would allow the Justice Department to sue OPEC nations in U.S. courts.

The House of Representatives last month voted 345-72 to approve the "No Oil Producing and Exporting Cartels Act of 2007," or "NOPEC."

The White House has threatened to veto the measure, and even if it became law, the Bush administration's Justice Department would have to initiate any lawsuit.

Some of the bill's opponents have warned that OPEC nations -- source of about a third of the world's oil -- could reciprocate and sue the United States in their courts, or refuse to sell oil to the United States.

Sen. Pete Domenici of New Mexico, the Senate Energy Committee's senior Republican, said last week the plan would hurt U.S. consumers more than it would OPEC.

"OPEC producers could just decide not to sell oil to us any longer," Domenici said. "They would suffer the loss of some profits but our entire economy could come to a grinding halt."

The United States, the world's biggest crude oil consumer, relies on imports for about 60 percent of its daily needs. Much of U.S. imports come from non-OPEC members like Canada and Mexico, but OPEC members like Venezuela, Nigeria and Saudi Arabia supply significant quantities.

While major industrialized energy importing countries have urged OPEC to pump more oil to curb prices that are currently just below $70 a barrel, OPEC says the high prices are due to geopolitical tensions and refinery bottlenecks in the United States rather than any shortage of crude supply.