[Federal Register Volume 69, Number 159 (Friday, October 8, 2004)]
[Notices]
[Pages 60390-60392]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-22696]


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FEDERAL TRADE COMMISSION

[File No. 041 0162]


Buckeye Partners, L.P., et al.; Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

[[Page 60391]]


ACTION: Proposed Consent Agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint that accompanies the consent agreement and the terms of the 
consent order--embodied in the consent agreement--that would settle 
these allegations.

DATES: Comments must be received on or before October 26, 2004.

ADDRESSES: Comments should refer to ``Buckeye Partners, L.P., et al., 
File No. 041 0162,'' to facilitate the organization of comments. A 
comment filed in paper form should include this reference both in the 
text and on the envelope, and should be mailed or delivered to the 
following address: Federal Trade Commission/Office of the Secretary, 
Room H-159, 600 Pennsylvania Avenue, NW., Washington, DC 20580. 
Comments containing confidential material must be filed in paper form, 
as explained in the Supplementary Information section. The FTC is 
requesting that any comment filed in paper form be sent by courier or 
overnight service, if possible, because U.S. postal mail in the 
Washington area and at the Commission is subject to delay due to 
heightened security precautions. Comments filed in electronic form 
(except comments containing any confidential material) should be sent 
to the following email box: [email protected].

FOR FURTHER INFORMATION CONTACT: Lesli Esposito, FTC, Bureau of 
Competition, 600 Pennsylvania Avenue, NW., Washington, DC 20580, (202) 
326-3450.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Section 2.34 
of the Commission's Rules of Practice, 16 CFR 2.34, notice is hereby 
given that the above-captioned consent agreement containing a consent 
order to cease and desist, having been filed with and accepted, subject 
to final approval, by the Commission, has been placed on the public 
record for a period of thirty (30) days. The following Analysis to Aid 
Public Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for September 27, 2004), on the World Wide Web, at http://www.ftc.gov/os/2004/09/index.htm. A paper copy can be obtained from the FTC Public 
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW., Washington, 
DC 20580, either in person or by calling (202) 326-2222.
    Public comments are invited, and may be filed with the Commission 
in either paper or electronic form. Written comments must be submitted 
on or before October 26, 2004. Comments should refer to ``Buckeye 
Partners, L.P., et al., File No. 041 0162,'' to facilitate the 
organization of comments. A comment filed in paper form should include 
this reference both in the text and on the envelope, and should be 
mailed or delivered to the following address: Federal Trade Commission/
Office of the Secretary, Room H-159, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580. If the comment contains any material for which 
confidential treatment is requested, it must be filed in paper (rather 
than electronic) form, and the first page of the document must be 
clearly labeled ``Confidential.'' \1\ The FTC is requesting that any 
comment filed in paper form be sent by courier or overnight service, if 
possible, because U.S. postal mail in the Washington area and at the 
Commission is subject to delay due to heightened security precautions. 
Comments filed in electronic form should be sent to the following e-
mail box: [email protected].
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    \1\ Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must be 
accompanied by an explicit request for confidential treatment, 
including the factual and legal basis for the request, and must 
identify the specific portions of the comment to be withheld from 
the public record. The request will be granted or denied by the 
Commission's General Counsel, consistent with applicable law and the 
public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).
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    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. All timely and responsive public comments, whether filed 
in paper or electronic form, will be considered by the Commission, and 
will be available to the public on the FTC Web site, to the extent 
practicable, at http://www.ftc.gov. As a matter of discretion, the FTC 
makes every effort to remove home contact information for individuals 
from the public comments it receives before placing those comments on 
the FTC Web site. More information, including routine uses permitted by 
the Privacy Act, may be found in the FTC's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

Analysis of Proposed Agreement Containing Consent Order To Aid Public 
Comment

    The Federal Trade Commission, subject to its final approval, has 
accepted for public comment an Agreement Containing Consent Order 
(``Proposed Order'') with Buckeye Partners, L.P. (``Buckeye'') and 
Shell Oil Company (``Shell''), which is designed to guard against 
possible anticompetitive effects that could result from the 
transaction, as originally proposed.
    On June 30, 2004, Buckeye and Shell entered into a Purchase and 
Sale Agreement in which Buckeye proposed to acquire a package of 
refined petroleum pipeline and terminal assets from Shell for 
approximately $530 million. Included in the assets to be acquired was a 
Shell refined petroleum terminal in Niles, Michigan. In response to 
competitive concerns raised by staff, the parties subsequently proposed 
a modified transaction that excludes the Niles, Michigan terminal from 
the assets to be acquired. The Proposed Order, if accepted by the 
Commission, would settle charges that the acquisition, as originally 
proposed, may have substantially lessened competition in the market for 
the terminaling of gasoline, diesel fuel, and other light petroleum 
products in the area within fifty miles of Niles, Michigan.
    The Proposed Order has been placed on the public record for thirty 
days for interested persons to comment. Comments received during this 
thirty day period will become part of the public record. After thirty 
days, the Commission will again review the Proposed Order and the 
comments received and will decide wether it should withdraw the 
Proposed Order or make the Proposed Order final.

The Proposed Complaint

    Buckeye is a partnership engaged in the storage, terminaling, and 
pipeline transportation of refined petroleum products, including 
gasoline, diesel fuel, and other light petroleum products. Shell is a 
diversified energy company engaged directly and through its 
subsidiaries in the business of manufacturing, refining, distributing, 
transporting, terminaling, and marketing a range of petroleum products, 
including gasoline, diesel fuel, jet fuel, base oil, motor oil, 
lubricants, petrochemicals, and other petroleum products.
    The proposed complaint alleges that a relevant line of commerce in 
which to evaluate the effects of Buckeye's proposed acquisition is the 
market for

[[Page 60392]]

terminaling of gasoline, diesel fuel, and other light petroleum 
products, and a relevant geographic market may be as small as the area 
within a fifty-mile radius of Niles, Michigan (``Niles Area''). The 
proposed complaint further alleges that market for terminaling services 
in the Niles Area is highly concentrated and that, had the original 
proposed acquisition been consummated, concentration in that market 
would have increased by 800 points, as measured by the Herfindahl-
Hirschman Index. The acquisition as modified would not change market 
concentration in the Niles Area because it does not involve the 
acquisition of Shell's Niles terminal. The proposed complaint also 
alleges that entry into the terminaling services market in the Niles 
Area is difficult and would not be timely, likely, or sufficient to 
deter or counteract the anticompetitive effects of the original 
proposed acquisition.
    The proposed complaint alleges that the acquisition, if consummated 
as originally proposed, may have led to a substantial lessening of 
competition in the supply of terminaling services for gasoline, diesel, 
and other light petroleum products in the Niles Area. The acquisition 
as originally proposed may have substantially increased concentration 
in a market that is already highly concentrated. The complaint further 
alleges competitive harm could result from the elimination of direct 
competition between Buckeye and Shell in the supply of terminaling 
services in the Niles Area, and from the increased likelihood of 
collusion or coordinated interaction between the remaining competitors 
in the relevant market.

Terms of the Proposed Consent Order

    The Proposed Order requires Buckeye to provide prior notification 
to the Commission of an acquisition of any interest in the Niles 
terminal, for a period of ten years. The Proposed Order requires Shell 
to provide prior notification to the Commission of a sale or transfer 
of any interest in the Niles terminal, for a period of ten years. These 
provisions require Buckeye and Shell to comply with premerger 
notification and waiting periods similar to those found in the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. 18a. 
(``HSR'').
    Consistent with the Commission's Statement of Policy Concerning 
Prior
    Approval and Prior Notice Provisions, 60 FR 39745 (Aug. 3, 1995), 
the Proposed Order ensures that the Commission will have the 
appropriate mechanism to review a proposed sale of the Niles terminal 
by Shell, or a proposed acquisition of the Niles terminal by Buckeye, 
that may raise antitrust concerns but would not be reportable under 
HSR. The Proposed Order affords the Commission the opportunity to guard 
against such potentially anticompetitive transactions.
    By accepting the Proposed Order, subject to final approval, the 
Commission anticipates that the competitive problem alleged in the 
Complaint will be resolved. The purpose of this analysis is to invite 
public comment concerning the Proposed Order to aid the Commission in 
its determination of whether it should make final the Proposed Order 
contained in the agreement. This analysis is not intended to constitute 
an official interpretation of the Proposed Order or to modify its terms 
in any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 04-22696 Filed 10-7-04; 8:45 am]
BILLING CODE 6750-01-P