Learsy: How Congress Must Now Act to Reduce Runaway Oil/Gasoline Prices

In a little noticed event reported in the Wall Street Journal last week, the United States arrested eight non American executives involved in connection with an international cartel accused of fixing prices for industrial rubber hose. Industrial hose is employed to transfer oil between tankers and storage facilities. Between 1999 and 2007, hundreds of millions of dollars worth of industrial rubber hose were purchased by the Defense Department, and an array of oil companies including Royal Dutch Shell, Exxon Mobil leading the Justice Department to invoke the U.S.’s tough criminal laws against cartels.

Industrial rubber hose? What does that have to do with the price of gasoline? Very, very little in the scheme of things. But, wait, what about the Justice Department and those criminal laws against cartels, and the oil flowing through that industrial rubber hose. Now, perhaps we are on to something.


The industrial rubber hose cartel may well be effective, but, no offense meant to the rubber hose industry, it is mickey mouse compared to the granddaddy of all cartels, the Organization of Petroleum Exporting Countries (OPEC) happily gouging us for the oil flowing through all that industrial rubber hose everywhere. And what has our vigilant Justice Department and our oil industry ambassadorial headquarters, the Department of Energy, or our Federal Trade Commission done about that cartel — well the answer is zero, zip, nothing and then some, forever trying to sweep OPEC’s pricing machinations under the “it’s all attributable to the forces of the marketplace” carpet. And in a style reminiscent of that American hero, Alfred E. Neuman, a communal shrug pointing to the great OPEC loophole of sovereign immunity, meaning since the OPEC banditry devolves from state-owned companies and resources, our anti trust laws can not be applied. So don’t worry, be happy. Smile at the pump. Certainly Shell and Exxon Mobil do when the gas is flowing the other way.

Well wait, it needn’t be that way. Why should OPEC be given a free pass. That question has been kicking around Congress since 1978 when the International Machinists and Aerospace Workers sued OPEC. The suit was thrown out by the courts who in their ‘wisdom’ decided that OPEC was protected against lawsuits by the foreign sovereign immunity doctrine, as though it was Saudi King Abdullah himself who was pumping gas at the local gas station.

Huffington Post