WASHINGTON -- The Senate Judiciary Committee today approved legislation sponsored by U.S. Senator Herb Kohl to give the federal government more tools to go after anti-competitive conduct in the oil and gas industry. The bipartisan Oil and Gas Industry Antitrust Act of 2006 will make several important and overdue reforms to U.S. antitrust laws. Kohl is the senior Democrat on the Senate Antitrust, Competition Policy and Consumer Rights, and the bill's chief cosponsor is Sen. Arlen Specter (R-PA), the chairman of the Senate Judiciary Committee. Last month, the Presidents and CEOs of six major American oil companies testified before the Judiciary Committee during a hearing on consolidation in the oil and gas industries. While consumers pay rapidly rising prices for gasoline and home heating fuel, the oil industry continues to report record profits -- like ExxonMobil's $36 billion last year, the $400 million retirement package given the company's departing CEO, and the $8.4 billion in first quarter profits it reported today.

"I'm glad the Committee moved so quickly to consider this legislation. While it is true that the world price of crude oil has substantially increased, the fact that the oil companies can so easily pass along all of these price increases to consumers - and compound their profits along the way - demonstrates that there is a failure of competition in our oil and gas markets, and a failure of antitrust enforcement," Kohl said.

The Kohl-Specter bill has five elements, each essential to strengthening antitrust enforcement in the petroleum industry. It contains two important changes to existing antitrust law. First, it will amend the Clayton Act to prohibit withholding supplies of petroleum, gasoline or any other fuel for the primary purpose of increasing prices or creating a shortage. This provision will prevent oil producers and refiners from limiting supply to manipulate price.

Second, it incorporates Kohl's bill to make the actions of the OPEC oil cartel subject to U.S. antitrust law. This provision will, for the first time, establish clearly and plainly that when a group of competing oil producers like the OPEC nations act together to restrict supply or set prices, they are violating U.S. law. This provision will authorize the Attorney General to file suit under the antitrust laws for redress, and will remove the protections of sovereign immunity and the act of state doctrine from nations that participate in the oil cartel.

The Oil and Gas Industry Antitrust Act of 2006 also will direct that the antitrust enforcement agencies undertake several important actions to promote competition. First, the bill will direct that the Justice Department and Federal Trade Commission conduct a study, and report their findings to Congress in nine months, as to whether the Clayton Act needs to be amended to ensure that mergers which truly lessen competition in the petroleum industry are prohibited. Second, the bill directs a study by the Government Accountability Office to be completed within six months to examine whether the consent decrees and divestitures obtained by the Justice Department or FTC in the oil industry have been effective in protecting competition. The Attorney General and FTC are directed to consider additional action require to restore competition upon completion of this report. Finally, the bill directs that the Attorney General and FTC Chairman establish a joint-federal state task force to investigate information sharing among companies producing, refining, or marketing petroleum, gasoline or any other refined product.

Kohl is also the author of legislation to direct the Secretary of Energy to establish and operate a strategic refining reserve and to authorize him to stop the exportation of gasoline and home heating oil when he supply falls short at home.

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