Specter mulls plan to rein in big oil, OPEC

By Chris Baltimore

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.