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Flaky arguments over breaking up big oil: independent economists see little or nothing to be gained, or lost by it

Journal Article · · Mines Mag.; (United States)
OSTI ID:5239089
Arguments over vertical divestiture of oil companies are reviewed and determined to be heavily influenced by a desire to reduce political clout rather than by solid economic issues. Proponents see divestiture as a way to increase competition and lower prices, while opponents foresee a disastrous future of reduced capital and unemployment. Independent economists, pointing out that the industry was subsidized for many years in a non-free market environment, feel that the main impact will be a costly environment of uncertainty during the transition period. They forsee little effect on the Organization of Petroleum Exporting Countries, the competitive position of U.S. companies relative to foreign integrated companies, corporate efficiency, or capital flow to finance energy projects. They concede that oil is one of the more market-competitive of the basic industries. The public, looking at the industry's 1973 record of overbuilding service stations and squeezing out independent companies, will be hard to convince that the same behavior won't follow future periods of scarcity. (DCK)
OSTI ID:
5239089
Journal Information:
Mines Mag.; (United States), Journal Name: Mines Mag.; (United States) Vol. 67:1; ISSN MMCOA
Country of Publication:
United States
Language:
English