June 11, 2005
Wyden criticizes oil giants merger plan
The Associated Press
WASHINGTON The Federal Trade Commission on Friday cleared the way for Chevron Corp. to acquire Unocal Corp. for $18 billion, voting 4-0 to settle a two-year-old complaint against Unocal
alleging anticompetitive practices.
The settlement ends a legal fight between Unocal and the FTC over the energy companys rights to a patent for reformulated gasoline.
Sen. Ron Wyden, D-Ore., criticized the FTCs action.
"Its troubling when the FTC settles its only enforcement case to protect West Coast gasoline consumers by agreeing to approve yet another oil industry mega-merger," Wyden said in a
statement. "The FTC may be preventing one company from using one anti-competitive practice in one state, but their agreement will allow more concentration and higher gasoline prices for consumers
up and down the West Coast."
The regulatory agency said the key element of the settlement is Chevrons agreement not to enforce patents of a Unocal subsidiary that could have increased gasoline prices in California by over
half a billion dollars a year, or almost six cents a gallon.
The FTCs long-standing complaint alleged that Unocal subsidiary Union Oil illegally acquired monopoly power in the technology market for producing low-emission gasoline mandated by the state of
California.
The complaint said Union Oil misrepresented to the California Air Resources Board that certain gasoline research was non-proprietary and in the public domain, while simultaneously pursuing a patent
that would enable it to charge substantial royalties if CARB used the research results in developing regulations.
Chevron announced in April the agreement to acquire Unocal.
Chevron explores for, refines and transports crude oil and gas. Unocals operations are in exploration and production of crude oil and natural gas, with no refineries or gasoline stations.
Together the two companies have over 11 percent of U.S. crude oil production.
FTC Chairman Deborah Platt Majoras recused herself from voting on the matter.