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The New York Times: Sen. Specter Weighs Action Against Big Oil

By REUTERS
Published: February 1, 2006
Filed at 12:24 p.m. ET
WASHINGTON (Reuters) – The chairman of the U.S. Senate Judiciary Committee said on Wednesday that Congress would attempt to address growing concerns about rising fuel prices and soaring oil industry profits.
“We intend to do something about'' rising prices to consumers, Chairman Arlen Specter said at a hearing into whether oil industry mergers in recent years have made gasoline more expensive at the pump.
Specter, a Pennsylvania Republican, said he was shocked by the size of oil company profits, adding, “It just may be time to legislate in this field.''
After the hearing, Specter raised the possibility of modifying federal antitrust laws to impose tougher oversight on mergers in the industry and crack down on any abuse of market power.
Further investigation was needed before reaching any final conclusions, Specter told reporters, but the number of mergers in recent years has been “excessive on its face.''
“There are a lot of red flags out there,'' he said, referring to rising prices and record industry profits.
Exxon Mobil Corp. said Monday it earned $10.7 billion in the fourth quarter of last year and $36.1 billion for all of 2005 — bigger than the economies of 125 countries.
Some industry critics have called for an excess profits tax.
Sen. Mike DeWine, chairman of the committee's antitrust subcommittee, said the biggest reason for the spike in fuel prices to consumers was rising crude oil prices.
DeWine, a Republican from Ohio, called for conservation measures and use of alternative fuels. “Try as we might, we simply can't drill our way out of this crisis,'' he told the hearing.
President George W. Bush said the United States was ''addicted to oil'' in his State of the Union speech on Tuesday, and called for developing alternative energy sources, such as ethanol-blended gasoline and hydrogen fuel cells.
Officials from six major oil companies refused to testify at the hearing. Specter criticized their failure to appear and said he might seek subpoenas to compel their testimony.
The Judiciary Committee had asked representatives from Exxon Mobil, Chevron Corp., ConocoPhillips, Valero Energy Corp. and the U.S. units of BP Plc and Royal Dutch Shell Plc to tell their side of the story.
William Kovacic, a member of the U.S. Federal Trade Commission, told the hearing that most sectors of the petroleum industry remained unconcentrated or moderately concentrated.
The FTC is investigating whether oil companies manipulated gasoline prices and oil refining production levels. The agency plans to finish its probe and send its findings to Congress this May.

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