WASHINGTON, DC, Apr. 11 -- An antitrust reform bill that US Senate Judiciary Committee Chairman Arlen Specter (R-Pa.) and other senators introduced last week is based on incorrect assumptions and would do substantial harm to US refiners, the National Petrochemical & Refiners Association said Apr. 10.
NPRA Pres. Bob Slaughter said the bill, S 2557, starts with a flawed assumption that industry consolidation has led to higher retail oil product prices.
"Today's refining industry is highly competitive. Data do not support the conclusion that acquisitions have increased prices. In fact, we believe companies have become more efficient through mergers and acquisitions plus organic growth. They continue to compete fiercely," he maintained.
Of the 54 existing US refiners, the largest accounts for only about 13% of the nation's total processing capacity, according to Slaughter. Large integrated companies own and operate about 10% of the more than 165,000 retail outlets in the US, he said.
"The Federal Trade Commission thoroughly evaluates every merger proposal, holds industry mergers to the highest standards of review, and subjects normal industry operations to a higher level of ongoing scrutiny," he said.
Mergers have helped many refiners become more efficient, said Slaughter. He noted that Valero Energy Corp. has increased the productive capacity of refineries it has acquired by more than 500,000 b/d in recent years.
Other concerns he expressed were:
-- The bill's provision dealing with refusals to sell crude oil, petroleum products, or natural gas may be an illegal trade barrier. "It is also unclear how the proposal would affect import markets," Slaughter said.
-- Creating a federal-state task force to monitor oil and gas information-sharing may not be necessary since there is no proof that such information-sharing is illegal. Two dozen analyses seem to contradict the assumption that any data are improperly shared, according to NPRA.
-- Attempting to enforce US antitrust laws against the Organization of Petroleum Exporting Countries, as one of the bill's key provisions suggests, is more likely to exacerbate a political situation that is already a cause for concern by applying extraterritorial jurisdiction and waiving the act of state doctrine.
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