Oct. 17, 2000
Proposed Chevron-Texaco Merger Would Be Bad for Consumers
Statement of Wenonah Hauter, Director, Public Citizen’s Critical Mass Energy and Environment Program
The proposed merger of Chevron-Texaco would be harmful to consumers, workers, the environment, the economy and our democracy. For these reasons, Public Citizen urges the Federal Trade Commission to block it.
This past year, we have seen the mergers of Exxon with Mobil, and BP Amoco with ARCO, which has meant more corporate power placed in fewer hands. As a general rule, mergers mean fewer competitors, higher prices for consumers and less responsiveness to public demands for corporate responsibility. We believe a Chevron-Texaco merger would follow this rule. Such a merger would encourage other oil companies to join, further concentrating power and intensifying the remaining firms’ oligopolistic pricing power.
However, anti-competitive behavior is not the only problem. The merger would create an oil giant with enormous political power. United, these two corporate behemoths would have an even greater ability to skew policy debates over such critical matters as labor standards, global climate change, oil and gas exploration in pristine areas, government support for renewable energy and energy efficiency technologies, corporate tax subsidies and excess profits taxes.
The oil and gas industry already uses its economic resources to subvert public policy; another merger would exacerbate this behavior. According to the Center for Responsive Politics, the oil and gas industry has given $4.6 million in political action committee (PAC) contributions to federal candidates in the 2000 election cycle and $10.2 million in soft money. (Chevrons PAC and soft money contributions total $867,127 for the same period, placing it fourth in the list of oil and gas companies. Texaco has given $410,977 in PAC and soft money, placing it eighth). And in 1998, the latest year for which data are available, the oil and gas industry spent $58 million dollars on lobbying, with Chevron and Texaco each spending more than $3 million dollars.
These enormous expenditures have helped oil and gas companies gain tax subsidies, weaken environmental laws and prevent the tightening of fuel-efficiency standards for cars and light trucks, which have remained largely unchanged since 1989. Tax legislation currently pending before Congress includes giveaways to the oil and gas industry that would cost the American taxpayer more than $2.2 billion through the year 2009.
We need to halt this cycle, and we urge the government to block this proposed merger.