The House Judiciary Committee, under the new Democrat Majority, just passed the so-called NOPEC legislation on a voice vote. The bill would extend anti-trust laws to OPEC countries now protected by sovereign immunity.
But in our view, the NOPEC bill is back to where it was in the last Congress when the Republican House Judiciary Committee passed it out of committee but the bill stalled for lack of support.
Low oil and gasoline prices don’t provide any momentum for the NOPEC bill. Unless oil prices rise to near $100 per barrel, the NOPEC bill is going nowhere.
The Trump Administration has repeatedly declined to support the NOPEC bill despite the best efforts of the bill’s cosponsors to get the President on board. The Justice Department’s anti-trust chief has only told Congress that the administration is “studying” the legislation.
President Trump is a critic of OPEC but he is not on the NOPEC train for two reasons:
- The strategic relationship with Saudi Arabia which would have the most exposure with Aramco's extensive operations and Motiva refinery in the US
- The US oil and gas industry opposes the bill because it will hamper their ability to do exploration deals in OPEC countries.
Indeed the American Petroleum Institute today sent a letter to Congress announcing its opposition to the NOPEC bill.
We maintain our policy forecast from last summer when we said the NOPEC bill lacks momentum in this current energy price environment. It is unlikely to gain traction or become law.
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This is a complimentary research update from our Senior Energy Policy analyst Joe McMonigle. If you'd like info on how to access his institutional research email sales@hedgeye.com
