Statement of Wenonah Hauter, Director of Public Citizen s Critical Mass Energy Project, on the FTC s Pending Approval of the Exxon-Mobil Merger
Nov. 29, 1999
Statement of Wenonah Hauter, Director of Public Citizen s Critical Mass Energy Project, on the FTC s Pending Approval of the Exxon-Mobil Merger
It is extremely unfortunate that the Federal Trade Commission is poised to approve the merger between oil giants Exxon Corporation and Mobil Corporation the first- and third-largest oil companies in the world. The merger is terrible news for consumers, because it is likely to lead to higher prices at the gas pumps and decreased competition.
The new company s unprecedented market dominance will only send other oil companies scrambling to find partners, further hampering competition.
To soften the blow to consumers, the FTC has ordered the merging companies to sell 2,400 gas stations in the northeastern United States, California and Texas. Exxon also must sell an oil refinery in Benicia, Calif. The purpose is to reduce the ability of the merged company to control the prices of oil products such as gasoline or heating oil.
In reality, though, these mandatory sales may do little good. The new oil company is expected to have staggering annual revenues, possibly larger than the economies of Denmark, Austria or Greece. Sadly, this likely will be the case even after the stations have been sold.
In addition, if the new company continues its usual practices, this mega-corporation will funnel millions of dollars to politicians, who have historically rewarded large oil company donors with legislation that thwarts environmental laws and harms consumers.
We therefore expect the new company to have enormous political clout, which will only further threaten democracy and the environment. Exxon and Mobil spent more than $22.2 million lobbying Congress during 1997 and 1998 and pumped almost $1.1 million into the campaign war chests of federal politicians. This legalized bribery has resulted in billions of dollars of tax breaks and giveaways to the oil and gas industry, as well as attacks on environmental regulations that protect the health and safety of our families and communities. It s a shame that the FTC is giving a green light to this continuing erosion of our environmental standards and consumer protections.
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