OPINION:
Since 1973 the U.S. economy has been at the mercy of tightly held oil producers masquerading as Middle Eastern sovereign states. Operating together as the Organization of Petroleum Exporting Countries, or OPEC, they’ve manipulated the price of oil, up and down and back again, taking trillions of dollars out of the United States.
Those days may be over. For the first time in decades, the United States is a net oil exporter. The International Energy Agency projects that by 2024 the U.S. oil exports could rival or even surpass the 8 million to 9 million barrels per day coming out of Saudi Arabia and Russia even as global demand for crude rises.
If crude exports from those nations and from OPEC generally hold steady while exports of the United States increase, the geo-political games played in global energy markets will take a turn in America’s favor. Even now President Trump is preparing to press the American advantage by deregulating the energy sector, boosting production and further increasing refinery capacity.
By pursuing the “drill here, drill now” policies that have become Republican orthodoxy since the Obama administration’s preference for an energy policy to eliminate fossil fuels was abandoned, the United States is on the verge of becoming the dominant energy power, leading both production and consumption.
This would be far better than the current state of affairs, in which OPEC, as President Trump frequently puts it, spends its time “ripping off the rest of the world.” For half a century OPEC sought to manipulate the oil market in ways detrimental to U.S. sovereignty, prosperity and national security. The global oil market is neither free nor fair.
That can be changed, and in anticipation of America’s looming new energy leadership role, it must be. To make sure the administration has the means to effectively challenge OPEC’s manipulation of the market, Congress must swiftly pass H.R. 948 and S. 370, the bipartisan No Oil Producing and Exporting Cartels Act, or NOPEC, and send it to the president for his signature.
OPEC holds over 80 percent of the known global oil reserves. As recently as 2014 it leveraged this advantage to maintain high production levels. OPEC caused the global price of oil to tumble from $110 per barrel in June 2014 to just $26 by February 2016. OPEC’s price manipulation put more than 300 U.S. oil and gas companies into bankruptcy, and a loss of more than 200,000 American jobs.
The NOPEC legislation, as it is referred to on Capitol Hill, keeps the promise that Republicans made to the American people in their 2016 platform by holding OPEC accountable for manipulating the market. Despite the advances in American production, the dominance of the Saudis in the global market leaves America and the West dangerously exposed. Limiting OPEC’s influence will provide critical support to domestic oil producers and significantly slow the flow of petrodollars to nations unfriendly to the United States.
“If you have a store and I have a store and we collude to set prices,” as President Trump says, “we go to jail. But that’s what [OPEC] does, and no one lifts a finger.” NOPEC would lift that finger, eliminating the loopholes in U.S. antitrust laws that have prevented OPEC from being subject to the same standards to which other industries in the U.S. economy are routinely held.
In his 2011 book “Time to Get Tough,” President Trump suggested America start by suing OPEC over violations of antitrust laws. Price-setting cartels are illegal under U.S. law. NOPEC would give the U.S government “the big stick” to back its demand to level the playing field, giving American consumers a fair deal for the first time in decades.
OPEC’s behavior puts U.S. economic and national security at risk, and it gives nations hostile to the United States the leverage to hobble attempts to bring a just peace to the most unstable region of the globe. The stakes are too high not to act, and to act decisively, putting an end to oil embargoes. It’s the right thing to do, and now is the right time to do it.
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