Senate Judiciary Committee Chairman Arlen Specter (R-PA) is considering introducing legislation that could make it more difficult for mergers in the oil and natural gas industry to be consummated.
The draft legislation, released Thursday, would prohibit the acquisition of oil and gas companies "if the effect of such acquisition may be to appreciably diminish competition," and would expose energy companies to prosecution under the Clayton Act if they withhold oil, gas or product supplies to drive up prices or create shortages in the market.
Specter released the discussion draft in advance of a committee hearing on Tuesday (March 14) that will address whether consolidation in the oil and gas industry has contributed to the escalation in oil and gas prices. Executives from major energy companies -- ExxonMobil, Chevron Corp., Royal Dutch Shell, BP and ConocoPhillips -- are expected to appear before the Senate Judiciary panel.
The draft measure also calls for the General Accountability Office to study the effectiveness of divestitures required by consent decrees, and to issue a report within 180 days to Congress, the Federal Trade Commission (FTC) and the Department of Justice. Based on the findings of the report, the attorney general or FTC chairman will decide if "any additional action is required to restore competition or prevent a substantial lessening of competition."
In addition, the draft would require Justice and the FTC to establish a joint federal-state task force to investigate the information-sharing practices of the oil and gas industry.
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