[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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