E N E R G Y
02/01/08
Research Report
#110-19
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OPEC feels in control of the oil market right now. It sees no compelling reason to increase supply and lower the oil price at this time to address the economic slowdown, because (1) a recession neither is certain nor believed to impair world oil demand very much, and (2) it wants to avoid increasing supply just as demand declines, and a seasonal decline is approaching in the second quarter.
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12/20/07
Research Report
#110-17
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WASHINGTON, D.C. – The explanation of the high oil price is largely a matter of OPEC’s constrained response to increases in Asian oil demand, but not entirely. It is also a matter of the reactions to high oil prices around the world.
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11/16/07
Research Report
#110-16
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Low gas prices have not vanished completely. On the international market, oil and gasoline prices have been surging. The well-worn explanation is that increasing oil consumption pushes against a strained supply chain, causing the price to rise. But there are domestic markets where oil consumption has accelerated and petroleum prices have not risen or not risen significantly; indeed the prices are reminiscent of those in the U.S. 35 years ago.
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10/16/07
Press Release
#110-25
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WASHINGTON, D.C. –The oil cartel should remove its production ceilings immediately in the face of sky high oil prices, Congressman Jim Saxton, ranking member of the Joint Economic Committee (JEC) said today. Statements from members of the Organization of Oil Exporting Countries (OPEC) reported today indicate that the oil cartel has no intent of increasing oil production despite crude oil prices nearing $88 per barrel and continued production restrictions by OPEC.
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9/10/07
Research
Report
#110-10
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OPEC’s public statements should not always be taken at face value, but they can provide clues about its intentions, particularly in retrospect when one can match observable actions to them. OPEC takes any new oil price peak that the world economy has absorbed, even for a short time, as the rightful price for its oil.
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8/02/07
JEC Study &
Press Release
#110-20
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WASHINGTON, D.C. – A temporary disruption of oil shipments from the Persian Gulf would be manageable, but even a small long-term disruption of such shipments would have a major impact on the price of oil, according to a new study released today by Congressman Jim Saxton, ranking Republican member of the Joint Economic Committee. The study, The Strait of Hormuz and the Threat of an Oil Shock, analyzes Persian Gulf oil shipments, scenarios of oil supply disruptions, potential market reactions and their effects on the price of oil, and the impact on the U.S. economy. The study concludes that the increased flexibility and resiliency of the U.S. economy has improved its ability to withstand a temporary oil supply disruption, although such a disruption could cause an economic recession.
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Download Study in PDF format
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2/27/07
Research
Report
#110-2
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The OPEC cartel has pursued a high price strategy in an oil market under pressure from rising demand. While it may have encountered short-run capacity constraints, OPEC did not commit to increase oil output and bring the price to a lower, more manageable level. Instead, it has actually cut oil output intermittently.
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12/13/06
JEC
Study &
Press Release
#109-106
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WASHINGTON, D.C. – There are many different types of automotive fuel. Most were known and put to practical use when the automotive age began in the 19th century. The special requirements of the automobile put a premium on high fuel energy density and manageable fuel volatility. Gasoline and diesel fuel compare favorably to most alternative fuels in one or both of these respects and tend to maximize driving range, safety, and ease of refueling. Most importantly, petroleum-based fuel has been less costly to produce on an increasing scale than the alternatives. In combination with the enduring efficiency of the four-stroke piston engine under varied, everyday operating conditions, gasoline and diesel have come to dominate automotive engineering. Mass-produced vehicle engines are optimized for gasoline or diesel1 and a dedicated refueling infrastructure has been built. The predominant engine designs and virtually ubiquitous filling stations give petroleum further competitive advantages over rival fuels. However, three major developments are prompting innovations that may challenge the preeminence of liquid petroleum-based fuels:
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Download Study in PDF format
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10/31/06
Research
Report
#109-46 |
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OPEC is anything but blameless in the oil price surge of the last two years. The cartel is the single greatest cause of market instability, as it fans market fears with intermittent quota and output cuts to extend the price surge. Even assuming that OPEC was surprised by increased Asian oil demand and initially hesitant to view the increase as permanent, the cartel has had plenty of time to exercise market leadership. Instead, OPEC refuses to endorse a long-term price band and opportunistically seeks to extract as much revenue from the market as feasible. This year the cartel’s oil revenue will approach $600 billion dollars, up from about $200 billion per year prior to 2003.
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06/26/06
Press Release
#109-80 |
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WASHINGTON, D.C. – Huge reserves of unconventional oil in Canada and their accelerated development will undermine the OPEC oil cartel in coming years, according to a new Joint Economic Committee (JEC) study released today by Chairman Jim Saxton. According to the study, Canadian Oil Sands: A New Force in the World Oil Market, estimates of proven oil reserves rank Canada second only to Saudi Arabia, with the possibility that Canada’s reserves may be even larger. Strong economic incentives would exist, even with oil prices at half the current level, to ramp up oil sands production and more than double output in ten years.
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05/30/06
Press Release
#109-79 |
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WASHINGTON, D.C. – The international oil cartel should end its system of production restrictions and plan to expand investments in production capacity when it meets June 1, Chairman Jim Saxton said today. Although the restrictive practices of the OPEC cartel are not the only reason for high oil prices, they remain important. A recent report by the nonpartisan Congressional Research Service (CRS) noted that among the events “leading up to the crisis,” were “Decisions by the Organization of Petroleum Exporting Countries (OPEC) cartel, after having reduced production quotas in 2002, to raise them only slowly and reluctantly.”
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05/26/06
Press Release
#109-78 |
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WASHINGTON, D.C. – A new study from the Federal Trade Commission (FTC) identifies the collusion of the Organization of Petroleum Exporting Countries (OPEC) as a major factor contributing to high oil prices, Chairman Jim Saxton said today. As the FTC notes, “OPEC is a functioning cartel whose activities would be illegal if undertaken by private companies.” Elsewhere, the study notes that OPEC “plays a significant role in the pricing of crude oil and, accordingly, in the pricing of gasoline.” Last November, Saxton released a JEC study examining the efforts of the OPEC cartel to manipulate the oil market.
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03/02/06
Press Release
#109-61 |
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WASHINGTON, D.C. - Iran’s immense oil and gas reserves undermine Iranian government claims that nuclear power is needed for energy production, according to a new report released by Joint Economic Committee Chairman Jim Saxton today. The report, Iran’s Oil and Gas Wealth, is an examination of Iranian oil and gas fields, related energy production, and oil exports. Iran has the second largest conventional oil reserves in the world, with 40 major producing oil fields, of which 27 are on-shore, and 13 off-shore. The report also notes that Iranian oil and gas reserves are significantly underdeveloped, resulting in an enormous energy output gap and a huge potential for peacefully supplying future Iranian energy needs.
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01/26/06
Press Release
#109-55 |
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WASHINGTON, D.C. - The U.S. economy is now much more able to withstand energy price shocks than it was 25 years ago, according to a new Joint Economic Committee study released today by Chairman Jim Saxton. The study, Energy Prices and the Economy, examines how the U.S. economy has become more energy efficient, less energy intensive, and more resilient in recent decades. As a result, past studies suggesting that significant oil price increases would lead to sharp declines in GDP growth were not reliable guides in predicting the course of economic growth in recent years. However, higher energy prices continue to have potential negative economic effects, even if they are much less severe than during the 1970s and early 1980s.
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01/20/06
Research
Report
#109-28 |
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The eleven members of the Organization of the Petroleum Exporting Countries (OPEC) together hold 902 billion barrels of oil reserves. The world consumed about 30.3 billion barrels in 2005. Thus OPEC alone could meet the world's current rate of oil consumption for nearly 30 years, without developing additional reserves. OPEC's oil production is the least costly on earth. The five largest members of OPEC are Persian Gulf countries with production costs less than $5 per barrel. OPEC members outside the Persian Gulf have somewhat higher costs but still below $9 per barrel.
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12/16/05
Research
Report
#109-26 |
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Many often repeated notions about the state of the world’s crude oil supply and the reasons for the high price of crude oil are wrong or at best half-truths. The oil market is dominated and manipulated by the OPEC cartel, which controls the lion’s share of the world’s oil reserves and has the lowest production cost. Its collusive actions distort market outcomes and have led to erroneous conclusions about the true state of the oil supply. The world crude oil market is not competitive and the prices it generates can not be properly interpreted as though it were. Following are ten common myths.
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12/12/05
Press Release #109-52 |
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WASHINGTON, D.C. - It is understandable that OPEC is pleased about current oil prices but exploited oil consumers have no reason to agree, Chairman Jim Saxton said today. Saxton’s remarks were in reaction to a prominent OPEC oil minister’s description of the world oil market as “beautifully balanced,” and a statement by OPEC’s president that cutting oil output before March would be “a logical proposal” worth consideration. Saxton’s statement follows:
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11/17/05
Press Release
#109-46 |
OPEC Conspires to Keep Oil Prices Too High
-- OPEC Costs Consumers More Than $1 Trillion --
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WASHINGTON, D.C. - The Organization of Petroleum Exporting Countries (OPEC) has unduly restricted its production of oil and is a major factor explaining high oil prices, according to a new study released today by Chairman Jim Saxton. The study, OPEC and the High Price of Oil, examines the cartel's oil reserves, production costs, collusive practices, and failure to adequately develop its vast oil fields.
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11/01/05
Research
Report
#109-22 |
Oil Prices and the Economy
- Before and After Katrina & Rita
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This brief addresses why the economy is more resilient to higher energy prices today than in the past and will survey the expected economic effects of hurricanes Katrina and Rita.
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9/19/05
Press Release
#109-36 |
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WASHINGTON, D.C. - The Organization of the Petroleum Exporting Countries (OPEC) should end its restrictive policies and significantly expand its production of oil, Chairman Jim Saxton of the Joint Economic Committee (JEC) said today. Last June, Saxton released a JEC report pointing out that the OPEC cartel was a major factor explaining high oil prices, partly because its members had failed to adequately develop their vast oil fields enough to meet world demand. Although OPEC investment and output have increased somewhat recently, world oil demand has increased rapidly.
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6/29/05
Research
Report
#109-12 |
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For three decades, OPEC has manipulated the oil market. The Persian Gulf countries sit on huge reserves of oil and are able to produce oil cheaply. The major ones, together with several non-Persian Gulf countries included in the cartel (Algeria, Libya, Nigeria, Indonesia, Venezuela), openly collude to restrict the output of oil and raise the price far above their cost. From the end of World War II until the oil embargo of 1973, Arabian Light crude oil sold for less than $2.50 per barrel; then the price shot up.
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