API Opposes NOPEC Legislation

API Opposes NOPEC Legislation
'This legislation creates significant potential detrimental exposure to U.S. diplomatic, military and business interests'.

In a recent letter to U.S. Senators Richard Durbin and Chuck Grassley, American Petroleum Institute (API) President and CEO Mike Sommers noted that the industry group opposes the Senate NOPEC legislation (S.977).

“This legislation creates significant potential detrimental exposure to U.S. diplomatic, military and business interests while likely having limited impact on the market concerns driving the legislation,” Sommers stated in the letter, which was published on the API’s website.

“Cartels for any commodity can be harmful to consumer interests, and this effort to restrict the market impact of OPEC nations is well-intended. However, the legislation threatens serious, unintended consequences for the U.S. oil and natural gas industry and its continued success in eroding OPEC’s negative market impacts,” Sommers added.

The API head warned in the letter that these legislative efforts represent a political act aimed at removing a sovereign nation’s litigation immunity from certain U.S. laws and opens the opportunity for reciprocal or even additional action on the part of those impacted countries.

“This could clearly have a negative impact on U.S. operations and investments in those countries across all sectors, which given the current geopolitical environment could create significant unintended consequences,” Sommers stated in the letter.

Sommers concluded the letter by noting that legislative efforts that strengthen American energy production would be the best approach to ensure market stability and protect America’s energy security.

S.977 was first introduced in the senate by Grassley on March 25, 2021, the Congress website shows. The bill, which is available to see on the Congress site, aims to “amend the Sherman Act to make oil-producing and exporting cartels illegal”. According to the site, S.977 still needs to pass the senate, pass the house, and go to the president before becoming law.

Earlier this month, OPEC+ concluded its 28th ministerial meeting via videoconference. At the meeting, the group reconfirmed the decision to adjust its monthly overall production upward by 432,000 barrels per day for the month of June, OPEC’s website outlined. OPEC+’s next meeting is currently scheduled to take place on June 2.

To contact the author, email andreas.exarheas@rigzone.com



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