Divestiture is a four-letter word, to some. [Effects of oil industry divestiture on chemical industry]
The bills pending in Congress to break up oil firms are causing concern among chemical industry executives. S. 2387, the Petroleum Industry Competition Act, as drafted in 1975 would have broken up the vertically integrated oil companies into separate production, transportation, refining, and marketing units, but as amended it will permit the oil companies to keep their refining and marketing interests intact. The major lobbying and public relations campaign against divestiture is summarized. (1) Vertical integration is not unique to the oil industry, nor is it necessarily bad. It is commonplace in many U.S. industries. (2) As structured, the oil industry is not a monopoly; in fact, it is highly competitive. Oil companies and their trade associations can present on demand a ream of statistics to show that many other industries are much more highly concentrated than petroleum. (3) If the oil companies are broken up, energy costs are certain to rise and the prospects of this country's ever achieving energy independence will decline. (4) Oil industry opponents are not out after the oil companies because they are ''bad'' but because they are ''big.'' Divestiture is presented as promoting economic advantages to oil companies and the chemical subsidiaries, but this would put the chemical subsidiaries in the competitive market. Chemical companies' executives also express concern about the domino effect, feedstock supply, the threat of uncertainty, duplication of services, justification for research projects, and job security. (MCW)
- Research Organization:
- Chemical and Engineering News, New York
- OSTI ID:
- 7345657
- Journal Information:
- Chem. Eng. News; (United States), Journal Name: Chem. Eng. News; (United States) Vol. 54:23; ISSN CENEA
- Country of Publication:
- United States
- Language:
- English
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CHEMICAL INDUSTRY
ECONOMIC POLICY
ECONOMICS
ENERGY SUPPLIES
INDUSTRY
LEGISLATION
OCCUPATIONS
PETROLEUM INDUSTRY
REGULATIONS
SECURITY