Oil Industry Merger Antitrust Enforcement Act

[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 2854 Introduced in Senate (IS)]

109th CONGRESS
  2d Session
                                S. 2854

To prevent anti-competitive mergers and acquisitions in the oil and gas
                               industry.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              May 18, 2006

 Mr. Kohl (for himself and Mr. DeWine) introduced the following bill;
  which was read twice and referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL

To prevent anti-competitive mergers and acquisitions in the oil and gas
                               industry.

    Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Oil Industry Merger Antitrust
Enforcement Act''.

SEC. 2. STATEMENT OF FINDINGS AND DECLARATIONS OF PURPOSES.

    (a) Findings.--Congress finds the following:
            (1) American consumers are suffering from excessively high
        prices for gasoline, natural gas, heating oil, and other energy
        products.
            (2) These excessively high energy prices have been caused,
        at least in substantial part, by undue concentration among
        companies involved in the production, refining, distribution,
        and retail sale of oil, gasoline, natural gas, heating oil, and
        other petroleum-related products.
            (3) There has been a sharp consolidation caused by mergers
        and acquisitions among oil companies over the last decade, and
        the antitrust enforcement agencies (the Federal Trade
        Commission and the Department of Justice Antitrust Division)
        have failed to employ the antitrust laws to prevent this
        consolidation, to the detriment of consumers and competition.
        This consolidation has caused substantial injury to competition
        and has enabled the remaining oil companies to gain market
        power over the sale, refining, and distribution of petroleum-
        related products.
            (4) The demand for oil, gasoline, and other petroleum-based
        products is highly inelastic so that oil companies can easily
        utilize market power to raise prices.
            (5) Maintaining competitive markets for oil, gasoline,
        natural gas, and other petroleum-related products is in the
        highest national interest.
    (b) Purposes.--The purposes of this Act are to--
            (1) ensure vigorous enforcement of the antitrust laws in
        the oil industry;
            (2) restore competition to the oil industry and to the
        production, refining, distribution, and marketing of gasoline
        and other petroleum-related products; and
            (3) prevent the accumulation and exercise of market power
        by oil companies.

SEC. 3. BURDEN OF PROOF.

    Section 7 of the Clayton Act (15 U.S.C. 18) is amended by adding at
the end the following:
    ``In any civil action brought against any person for violating this
section in which the plaintiff--
            ``(1) alleges that the effect of a merger, acquisition, or
        other transaction affecting commerce may be to substantially
        lessen competition, or to tend to create a monopoly, in the
        business of exploring for, producing, refining, or otherwise
        processing, storing, marketing, selling, or otherwise making
        available petroleum, oil, or natural gas, or products derived
        from petroleum, oil, or natural gas; and
            ``(2) establishes that a merger, acquisition, or
        transaction is between or involves persons competing in the
        business of exploring for, producing, refining, or otherwise
        processing, storing, marketing, selling, or otherwise making
        available petroleum, oil, or natural gas, or products derived
        from petroleum, oil, or natural gas;
the burden of proof shall be on the defendant or defendants to
establish by a preponderance of the evidence that the merger,
acquisition, or transaction at issue will not substantially lessen
competition or tend to create a monopoly.''.

SEC. 4. ENSURING FULL AND FREE COMPETITION.

    (a) Review.--The Federal Trade Commission and the Antitrust
Division of the Department of Justice shall jointly review and revise
all enforcement guidelines and policies, including the Horizontal
Merger Guidelines issued April 2, 1992 and revised April 8, 1997, and
the Non-Horizontal Merger Guidelines issued June 14, 1984, and modify
those guidelines in order to--
            (1) specifically address mergers and acquisitions in oil
        companies and among companies involved in the production,
        refining, distribution, or marketing of oil, gasoline, natural
        gas, heating oil, or other petroleum-related products; and
            (2) ensure that the application of these guidelines will
        prevent any merger and acquisition in the oil industry, when
        the effect of such a merger or acquisition may be to
        substantially lessen competition, or to tend to create a
        monopoly, and reflect the special conditions prevailing in the
        oil industry described in subsection (b).
    (b) Special Conditions.--The guidelines described in subsection (a)
shall be revised to take into account the special conditions prevailing
in the oil industry, including--
            (1) the high inelasticity of demand for oil and petroleum-
        related products;
            (2) the ease of gaining market power in the oil industry;
            (3) supply and refining capacity limits in the oil
        industry;
            (4) difficulties of market entry in the oil industry; and
            (5) unique regulatory requirements applying to the oil
        industry.
    (c) Competition.--The review and revision of the enforcement
guidelines required by this section shall be completed not later than 6
months after the date of enactment of this Act.
    (d) Report.--Not later than 6 months after the date of enactment of
this Act, the Federal Trade Commission and the Antitrust Division of
the Department of Justice shall jointly report to the Committee on the
Judiciary of the Senate and the Committee on the Judiciary of the House
of Representatives regarding the review and revision of the enforcement
guidelines mandated by this section.

SEC. 5. DEFINITIONS.

    In this Act:
            (1) Oil industry.--The term ``oil industry'' means
        companies and persons involved in the production, refining,
        distribution, or marketing of oil or petroleum-based products.
            (2) Petroleum-based product.--The term ``petroleum-based
        product'' means gasoline, diesel fuel, jet fuel, home heating
        oil, natural gas, or other products derived from the refining
        of oil or petroleum.
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