FTC Merger Enforcement Actions in the Natural Gas Industry since 1981

FTC Merger Enforcement Actions in the Petroleum Industry since 1981

Firms (Year)*	Markets Affected	Theory of Anti- competitive Effects	Concentration (HHI)	FTC Enforcement Action
Western Refining/ Giant Industries (2007)[1]	Bulk supply of gasoline to Northern New Mexico	Unilateral/ Coordinated	Post merger>1800, change>50 (all inferred)	Preliminary injunction sought but denied; administrative complaint withdrawn pending decision on further proceedings
Kinder Morgan/ Carlyle Group and Riverstone Holdings (2007)[2]	Eleven gasoline and light petroleum products terminaling markets in the Southeast	Unilateral/ Coordinated	Post merger >1800, change >50 or Post merger >1000, change >100 (all inferred)	Carlyle’s and Riverstone’s interests in Magellan pipeline rendered passive; exchange of competitively sensitive information prohibited
Aloha/ Trustreet (2005)[3]	1. Gasoline marketing in Hawaii	Unilateral/ Coordinated	Post-merger 2744 Change 220	Complaint resolved with 20 year terminal throughput agreement for new gasoline marketer
Aloha/ Trustreet (2005)[3]	2. Gasoline retailing in Oahu	Unilateral	Not publicly available	As above
Chevron/ Unocal (2005)[4]	Marketing and refining of CARB RFG in California and smaller markets therein	Coordinated	Highly (HHI > 1800) or moderately concentrated (HHI > 1000)	Chevron’s constrained from enforcing Unocal’s patents on CARB RFG
Valero/Kaneb (2005)[5]	1. Terminaling of light products in the Philadelphia area	Coordinated	Post Merger >1800 (inferred) Change>50 (inferred)	Divestiture of Kaneb’s three Philadelphia area terminals
	2. Terminaling of light products in the Colorado Front Range	Coordinated	Post Merger >1800 (inferred) Change>50 (inferred)	Divestiture of Kaneb’s West Pipeline system, including associated terminals
	3. Terminaling of light products in Northern California	Coordinated	Post Merger >1800 (inferred) Change>50 (inferred)	Divestiture of two Kaneb terminals in Northern California
	4. Terminaling of ethanol in Northern California	Coordinated/ Vertical	Not publicly available	As above and information firewall and third party access terms required
Shell/Buckeye (2004)[6]	Terminaling of gasoline, diesel, and other light petroleum products within a 50-mile radius of Niles, Michigan	Coordinated	Post-merger 3600 Change 800	Prior approval for acquisition of Western Michigan terminal required
Magellan/ Shell5 (2004)[7]	Terminaling of light products in the Oklahoma City area	Coordinated	Post-merger > 4300 Change > 1200	Divestiture of Shell’s Oklahoma City terminal assets
Shell/ Pennzoil Quaker State (2002) [8]	Refining and marketing of paraffinic base oil in U.S. and Canada	Unilateral / Coordinated	Post-merger >2300 Change >700	Divestiture of Pennzoil interest in lube oil joint venture; Pennzoil sourcing of lube oil from third party lube oil refiner frozen at current level
Phillips/ Conoco (2002)[9]	1. Bulk supply (via refining or pipeline) of light petroleum products in eastern Colorado	Coordinated	Post-merger > 2600 Change > 500	Divestiture of Conoco refinery in Denver and all of Phillips marketing assets in eastern Colorado
	2. Bulk supply of light petroleum products in northern Utah	Coordinated	Post-merger > 2100 Change > 300	Divestiture of Phillips refinery in Salt Lake City and all of Phillips marketing assets in northern Utah
	3. Terminaling services in the Spokane, Washington area	Unilateral / Coordinated	Post-merger 5000 Change > 1600	Divestiture of Phillips’ terminal at Spokane
	4. Terminaling services for light products in the Wichita, Kansas area	Unilateral / Coordinated	Post-merger > 3600 Change > 750	Terminal throughput agreement with option to buy 50% undivided interest in Phillips terminal
	5. Bulk supply of propane in southern Missouri	Unilateral / Coordinated	Post-merger 3700 Change > 1200	Divestiture of Phillips’ propane business at Jefferson City and E. St. Louis; contracts giving buyer nondiscriminatory access to market at Conway, KS
	6. Bulk supply of propane in St. Louis	Unilateral / Coordinated	Post-merger > 7700 Change > 1000	As above
	7. Bulk supply of propane in southern Illinois	Unilateral / Coordinated	Post-merger > 7700 Change > 1000	As above
	8. Natural gas gathering by pipeline in certain parts of western Texas and southeastern New Mexico (Permian Basin)	Unilateral[10]	Not publicly available	Divestiture of Conoco’s gas gathering assets in each area
	9. Fractionation of natural gas liquids at Mont Belvieu, Texas	Unilateral / Coordinated[11]	Not publicly available	Prohibitions on transfers of competitive information; voting requirements for capacity expansion
Valero/UDS (2001)[12]	1. Refining and Bulk Supply of CARB 2 gasoline for northern California	Unilateral / Coordinated	Post-merger > 2700 Change > 750	Divestiture of UDS’s refinery at Avon, CA, bulk gasoline supply contracts, and 70 owned and operated retail outlets
	2. Refining and Bulk Supply of CARB 3 gasoline for northern California	Unilateral / Coordinated	Post-merger > 3050 Change >1050	As above
	3. Refining and Bulk Supply of CARB 2 gasoline for state of California	Coordinated	Post-merger > 1750 Change > 325	As above
	4. Refining and Bulk Supply of CARB 3 gasoline for state of California	Coordinated	Post-merger >1850 Change > 390	As above
Chevron/ Texaco (2001)[13]	1. Gasoline marketing in numerous separate markets in 23 western and southern states	Coordinated	Post-merger range from 1000-1800 Change >100 to Post merger >1800 Change >50 (all inferred)	Divestiture (to Shell, the other owner of Equilon) of Texaco’s interests in the Equilon and Motiva joint ventures (including Equilon’s interests in the Explorer and Delta Pipelines)
	2. Marketing of CARB gasoline in California	Unilateral / Coordinated	Post-merger range >2000 Change >50	As above
	3. Refining and bulk supply of CARB gasoline for California	Unilateral / Coordinated	Post-merger 2000 Change 500	As above
	4. Refining and bulk supply of gasoline and jet fuel in the Pacific Northwest	Coordinated	Post-merger > 2000 Change > 600	As above
	5. Refining and bulk supply of RFG II gasoline for the St. Louis metropolitan area	Coordinated[14]	Post-merger > 5000 Change > 1600	As above
	6. Terminaling of gasoline and other light products in various geographic markets in California, Arizona, Hawaii, Mississippi, and Texas	Unilateral / Coordinated	Post-merger range >2000 Change >300	As above
	7. Crude oil transportation via pipeline from California’s San Joaquin Valley	Coordinated	Post-merger > 3300 Change >800	As above
	8. Crude oil transportation from the offshore Eastern Gulf of Mexico	Unilateral[15]	Post-merger >1800 (inferred) Change >50 (inferred)	As above
	9. Natural gas transportation from certain parts of the Central Gulf of Mexico offshore area	Unilateral / Coordinated[16]	Post-merger >1800 (inferred) Change >50 (inferred)	Divestiture of Texaco’s 33% interest in the Discovery Gas Transmission System
	10. Fractionation of natural gas liquids at Mont Belvieu, Texas	Unilateral / Coordinated[17]	Not publicly available	Divestiture of Texaco’s minority interest in the Enterprise fractionator
	11. Marketing of aviation fuels to general aviation in the Southeast U.S.	Unilateral / Coordinated	Post-merger > 1900 Change > 250	Divestiture of Texaco’s general aviation business to an up-front buyer
	12. Marketing of aviation fuels to general aviation in the western U.S.	Unilateral / Coordinated	Post-merger > 3400 Change > 1600	As above
BP/ARCO (2000)[18]	1. Production and sale of Alaska North Slope (“ANS”) crude oil	Unilateral[19]	Post-merger >5476 Change 2640	FTC filed in federal District Court, then reached consent; divestiture of all of ARCO’s Alaska assets[20]
	2. Bidding for ANS crude oil exploration rights in Alaska	Unilateral[21]	Post-merger >1800 (inferred) Change >50 (inferred)	As above
	3. Transportation of ANS crude oil on the Trans-Alaska Pipeline System	Unilateral / Coordinated[22]	Post-merger >5600 Change 2200	As above
	4. Future commercialization of ANS natural gas (potential competition)	Unilateral / Coordinated[23]	Not applicable	As above
	5. Crude oil transportation and storage services at Cushing, Oklahoma	Unilateral[24]	Post-merger >1849 for storage >2401 for pipelines >9025 for trading services Changes >50 (inferred)	Divestiture of all of ARCO’s pipeline interests and storage assets related to Cushing
Exxon/ Mobil (1999)[25]	1. Gasoline marketing in at least 39 metro areas in the Northeast (Maine to New York) and Mid-Atlantic (New Jersey to Virginia) regions of the U.S.	Unilateral / Coordinated	Post-merger range from 1000-1800 Change >100 to Post-merger >1800 Change >50 (all inferred)	Divestiture of all Exxon (Mobil) owned outlets and assignment of agreements in the Northeast (Mid-Atlantic) region
	2. Gasoline marketing in five metro areas of Texas	Unilateral / Coordinated	Post-merger range from 1000-1800 Change >100 to Post-merger >1800 Change >50 (all inferred)	Divestiture of Mobil’s retail outlets and supply agreements
	3. Gasoline marketing in Arizona (potential competition)	Coordinated	Not applicable	Termination of Exxon’s option to repurchase retail outlets previously sold to Tosco
	4. Refining and marketing of “CARB” gasoline in California	Unilateral / Coordinated	Post-merger 1699 Change 171 (measured by refining capacity)	Divestiture of Exxon’s refinery at Benicia, CA, and all of Exxon’s marketing assets in CA, including assignment to the refinery buyer of supply agreements for 275 outlets
	5. Refining of Navy jet fuel on the west coast	Unilateral / Coordinated	Post merger >1800 (inferred) Change >50 (inferred)	As above
	6. Terminaling of light products in Boston, MA and Washington, DC areas	Unilateral / Coordinated	Post merger >1800 (inferred) Change >50 (inferred)	Divestiture of a Mobil terminal in each area
	7. Terminaling of light products in Norfolk, VA area	Unilateral / Coordinated	Post merger >1800 (inferred)	Continuation of competitor access to wharf
	8. Transportation of light products to the Inland Southeast	Coordinated[26]	Post-merger >1800 (inferred)	Divestiture of either party’s pipeline interest
	9. Transportation of Crude Oil from the Alaska North Slope	Coordinated[27]	Post-merger >1800 (inferred) Change >50 (inferred)	Divestiture of Mobil’s 3% interest in TAPS
	10. Terminaling and gasoline marketing assets on Guam	Unilateral / Coordinated	Post-merger 7400 Change 2800	Divestiture of Exxon’s terminal and retail assets on the island
	11. Paraffinic base oil refining and marketing in the U.S. and Canada	Unilateral / Coordinated	Post-merger range 1000 to 1800 (inferred) Change >100 (inferred)	Relinquishment of contractual control over Valero’s base oil production; long term supply agreements at formula prices for volume of base oil equal to Mobil’s U.S. production
	12. Refining and marketing of jet turbine oil worldwide	Unilateral[28]	Pre-merger >5625	Divestiture of Exxon jet turbine oil manufacturing facility at Bayway, NJ, with related patent licenses and intellectual property
BP/ Amoco (1998)[29]	1. Terminaling of gasoline and other light products in nine separate metropolitan areas, mostly in the Southeast U.S.	Coordinated	Post-merger range >1500 ->3600 Change >100	Divestiture of a terminal in each geographic market
BP/ Amoco (1998)[29]	2. Wholesale sale of gasoline in thirty cities or metropolitan areas in the Southeast U.S. and parts of Ohio and Pennsylvania	Coordinated	Post-merger range >1400->1800 Change >100	Divestiture of BP’s or Amoco’s owned retail outlets in eight geographic areas; in all 30 areas jobbers and open dealers given option to cancel without penalty
Shell/Texaco (1997)[30]	1a. Refining of gasoline for the Puget Sound area	Unilateral / Coordinated	Post-merger 3812 Change 1318	Divestiture of Shell refinery at Anacortes, WA; Shell jobbers and dealers given option to contract with purchaser
	1b. Refining of jet fuel for the Puget Sound area	Unilateral / Coordinated	Post-merger 5248 Change 481	As above
	2a. Refining of gasoline for the Pacific Northwest	Unilateral / Coordinated	Post-merger 2896 Change 561	As above
	2b. Refining of jet fuel for the Pacific Northwest	Unilateral / Coordinated	Post-merger 2503 Change 258	As above
	3. Refining of “CARB” gasoline for California	Unilateral / Coordinated	Post-merger 1635 Change 154	As above
	4. Transportation of undiluted heavy crude oil to San Francisco Bay area for refining of asphalt	Unilateral[31]	Not applicable	Ten year extension of crude oil supply agreement.
	5. Pipeline transportation of refined light products to the inland Southeast U.S.	Coordinated[32]	Pre-merger >1800	Divestiture of either party’s pipeline interest
	6. CARB gasoline marketing in San Diego County, California	Coordinated	Post-merger 1815 Change 250	Divestiture to a single entity of retail outlets with specified individual and combined volume
	7. Terminaling and marketing of gasoline and diesel fuel on the island of Oahu, Hawaii	Coordinated	Post-merger 2160 Change 267	Divestiture of either Shell’s or Texaco’s terminal and associated retail outlets
Sun/ Atlantic (1988)[33]	Terminaling and marketing of light products in Williamsport, PA and Binghamton, NY	Coordinated	Not publicly available	Divestiture of terminal and associated owned retail outlets in each area
PRI/Shell (1987)[34]	1. Terminaling and marketing of light petroleum products on the individual island of Oahu, HI	Unilateral / Coordinated	Not publicly available	FTC won preliminary injunction in U.S. District Court; prior approval required for future acquisitions
PRI/Shell (1987)[34]	2. Terminaling and marketing of light petroleum products on the individual islands of Maui, Hawaii, and Kauai in the state of Hawaii (potential competition)	Unilateral / Coordinated	Not publicly available	As above
Conoco/ Asamera (1986)[35]	1. Bulk supply (from refineries and pipelines) of gasoline and other light products to eastern Colorado	Unilateral[36] / Coordinated	Not publicly available	FTC voted to seek preliminary injunction; parties abandoned the transaction
Conoco/ Asamera (1986)[35]	2. Purchasing of crude oil in the Denver-Julesberg Basin of northeastern Colorado	Unilateral	Not publicly available	As above
Chevron/ Gulf (1984)[37]	1. Bulk supply of kerosene jet fuel in parts of PADDs I and III and the West Indies and Caribbean islands	Coordinated	Not publicly available	Divestiture of one of two specified Gulf refineries in Texas and Louisiana.
	2. Transport of light products to the inland Southeast	Coordinated[38]	Not publicly available	Divestiture of Gulf’s interest in the Colonial Pipeline
	3. Wholesale distribution of gasoline and middle distillates in numerous markets in West Virginia and the South	Coordinated	Not publicly available	Divestiture of all Gulf marketing assets in six states and parts of South Carolina
	4. Transport of crude oil from West Texas/New Mexico	Unilateral / Coordinated[39]	Not publicly available	Divestiture of Gulf interests in specified crude oil pipelines, including 51% of Gulf’s interest in the West Texas Gulf Pipeline Company
Texaco/Getty (1984)[40]	1. Refining of light products in the Northeast[41]	Unilateral	Not publicly available	Divestiture of Texaco refinery at Westville, NJ
	2. Pipeline transportation of light products into the Northeast	Unilateral / Coordinated[42]	Not publicly available	Texaco required to support all Colonial pipeline expansions for ten years
	3. Pipeline transportation of light products into Colorado	Unilateral / Coordinated[43]	Not publicly available	Divestiture of either Texaco pipeline interest or Getty refining interests
	4. Wholesale distribution of gasoline and middle distillates in various parts of the Northeast	Coordinated	Not publicly available	Divestiture of Getty marketing assets in the Northeast, and a Texaco terminal in Maryland
	5. Sale and transport of heavy crude oil in California	Unilateral[44]	Not publicly available	Texaco required to supply crude oil and crude pipeline access to former Getty customers under specified terms
Gulf/Cities Service (1982)[45]	1. Wholesale distribution of gasoline in various areas in the East and Southeast	Coordinated	Not publicly available	Gulf withdrew its tender offer after the FTC obtained a temporary restraining order prior to a preliminary injunction hearing
	2. Manufacture and sale of kerosene jet fuel in PADDs I and III and parts thereof	Coordinated	Not publicly available	As above
	3. Pipeline transportation of refined products into the Mid Atlantic and Northeast	Unilateral[46]	Not publicly available	As above
Mobil/ Marathon (1981)[47]	Wholesale marketing of gasoline and middle distillates in various markets in the Great Lakes area	Unilateral / Coordinated[48]	Not publicly available[49]	FTC sought preliminary injunction, but before hearings were held Mobil withdrew tender offer as a result of injunction in a separate, private litigation
Source: Compiled from FTC complaints, orders, and analyses to aid public comment.
* Note: This table lists enforcement actions in reverse chronological order. The year cited is the year in which the merger was proposed and most of the FTC activity occurred; in some cases, a consent order was not final until a later calendar year.

[1] Western Refining/Giant Industries, First Amended Complaint for Preliminary Injunction, ¶¶ 33-34.

[2] Riverstone/Carlyle (2007), Complaint ¶ ¶ 26-35; Analysis of Proposed Consent Order to Aid Public Comment.

[3] Complaint, filed in U.S. District Court, District of Hawaii, CV05-00471 (2005); FTC Press Release (September 6, 2005). Prior to the beginning of district court hearings, Aloha entered into a 20 year throughput agreement with Mid Pac Petroleum. Since this agreement resolved the FTC’s concerns with the challenged transaction, the FTC asked the court to dismiss the complaint.

[4] Chevron/Unocal (2005), Complaint ¶¶ 13-19, Analysis of Proposed Consent Order to Aid Public Comment.

[5] Valero/Kaneb (2005), Complaint ¶ ¶ 15-76; Analysis of Proposed Consent Order to Aid Public Comment.

[6] Shell/Buckeye (2004), Complaint ¶¶ 7-19, Analysis of Proposed Agreement Containing Consent Order to Aid Public Comment.

[7] Magellan/Shell (2004), Complaint ¶¶ 8-15, Analysis of Proposed Consent Order to Aid Public Comment.

[8] Shell/Pennzoil-Quaker State (2002), Complaint ¶¶ 8-16, Analysis of Proposed Consent Order to Aid Public Comment.

[9] Phillips/Conoco (2002), Complaint ¶¶ 8-135; Analysis of Proposed Consent Order to Aid Public Comment.

[10] Phillips owned 30% of Duke Energy Field Services (DEFS); DEFS and Conoco were the only gatherers in the Permian Basin. Phillips/Conoco (2002), Complaint ¶¶ 69-71.

[11] Phillips owned 30% of DEFS, with representation on its Board of Directors; DEFS held an interest in two of the four fractionators in the market. Conoco partially owned and operated a third, Gulf Coast Fractionators. The merger would have given the combined firm veto power over significant expansion projects and might have led to the sharing of competitively sensitive information. Phillips/Conoco (2002), Complaint ¶¶ 76-79

[12] Valero/UDS (2001), Complaint ¶¶ 13-21; Analysis of Proposed Consent Order to Aid Public Comment.

[13] Chevron/Texaco (2001), Complaint ¶¶ 12-57; Analysis of Proposed Consent Order to Aid Public Comment.

[14] Chevron held a 17% interest in Explorer Pipeline, and Texaco and Equilon (Texaco’s joint venture with Shell) together held 36%. Explorer is the largest pipeline supplying bulk Phase II Reformulated Gasoline (RFG II) to St. Louis; at the time, Equilon also had a long-term contract that gave it control of much of the output of a local St. Louis area refinery. Chevron/Texaco (2001), Analysis of Proposed Consent Order to Aid Public Comment.

[15] Equilon owned 100% of Delta, and Chevron owned 50% of Cypress; these two pipelines were the only means of transporting crude from the Eastern Gulf of Mexico to on-shore terminals. Chevron/Texaco (2001), Analysis of Proposed Consent Order to Aid Public Comment.

[16] Texaco owned 33% of the Discovery Gas Transmission System; Chevron and its affiliate Dynegy together owned 77% of the Venice Gathering System, one of only two other pipeline systems for transporting natural gas from this area. Chevron/Texaco (2001), Analysis of Proposed Consent Order to Aid Public Comment.

[17] Chevron owned 26% of Dynegy, which held large interests in two of the four fractionators in the market, and had representation on Dynegy’s Board of Directors; Texaco held a minority interest in a third. The merger might have exercise unilateral market power. Chevron/Texaco (2001), Analysis of Proposed Consent Order to Aid Public Comment.

[18] BP/ARCO (2000), Complaint ¶¶ 10-66; Analysis of Proposed Consent Order to Aid Public Comment.

[19] BP had a 44% share of ANS crude oil production at that time, while ARCO had a 30% share, implying that their contribution to the HHI was 2,836. Their contribution to the post-merger HHI would have been 5476. BP/ARCO (2000), Analysis of Proposed Consent Order to Aid Public Comment.

[20] The ARCO Alaska assets divested included crude oil exploration and production assets, 22% interest in TAPS, and specialized tanker ships. BP/ARCO (2000), Analysis of Proposed Consent Order to Aid Public Comment.

[21] BP and ARCO together won 60% of the Alaska state lease auctions during the 1990s, while the top four bidders won 75%. BP/ARCO (2000), Analysis of Proposed Consent Order to Aid Public Comment.

[22] BP (50%) and ARCO (22%) both held interests in TAPS. Their contribution to the HHI would have been 2,984 pre-merger and 5,184 post-merger. There were five other owners of TAPS; Exxon held 20% (see note 20 infra), and the four others’ shares are not publicly available; including Exxon and assigning the four other firms equal shares yields a lower bound for the HHI of 3,400 pre-merger or of 5,600 post-merger. BP/ARCO (2000), Analysis of Proposed Consent Order to Aid Public Comment.

[23] The FTC alleged that BP Amoco, ARCO, and Exxon Mobil were the only three companies that held “sufficiently large volumes of gas reserves to have the potential to develop those reserves for significant commercial use.” BP/ARCO (2000), Analysis of Proposed Consent Order to Aid Public Comment.

[24] BP and ARCO together accounted for 43% of storage capacity, 49% of pipeline capacity, and 95% of trading services at Cushing. BP/ARCO (2000), Analysis of Proposed Consent Order to Aid Public Comment.

[25] Exxon/Mobil (1999), Complaint ¶¶ 8-54; Analysis of Proposed Consent Order to Aid Public Comment.

[26] Exxon owned 49% of Plantation Pipeline and Mobil owned 11% of Colonial Pipeline. Exxon/Mobil (1999), Complaint ¶ 13.

[27] Exxon and Mobil owned 20% and 3%, respectively, of the Trans-Alaska Pipeline System (TAPS), the only means of transporting Alaskan North Slope (ANS) crude oil to the port facilities at Valdez, AK. Exxon/Mobil (1999), Complaint¶ 14.

[28] Exxon and Mobil together accounted for 75% of worldwide sales, and 90% of worldwide sales to commercial airlines. Exxon/Mobil (1999), Analysis of Proposed Consent Order to Aid Public Comment.

[29] BP/Amoco (1998), Complaint ¶¶ 8-21; Analysis of Proposed Consent Order to Aid Public Comment.

[30] Shell/Texaco (1997), Complaint ¶¶ 10-37; Analysis of Proposed Consent Order to Aid Public Comment.

[31] The Texaco heated pipeline was the only pipeline supplying undiluted heavy crude oil to the San Francisco Bay area, where Shell and a competitor refined asphalt. Shell/Texaco (1997), Complaint ¶ 15.

[32] Shell owned 24% of Plantation Pipeline and Texaco owned 14% of Colonial Pipeline. Shell/Texaco (1997), Complaint ¶ 32.

[33] Sun/Atlantic (1988), Complaint and Order.

[35] Conoco/Asamera (1986), Complaint that the Commission voted to pursue.

[36] The Preliminary Injunction Complaint in Conoco/Asamera alleged that the merger would create a dominant firm in the relevant markets. Conoco/Asamera (1986), Complaint that the Commission voted to pursue ¶ 15.

[37] Chevron/Gulf (1984), Complaint ¶¶ 15-41.

[38] Gulf owned the largest share, 16.78%, of Colonial Pipeline, while Chevron owned the second largest share, 27.13%, of Plantation Pipeline, Colonial’s only direct competitor. Chevron/Gulf (1984), Complaint ¶¶ 25-26.

[39] Chevron owned a proprietary pipeline running from the West Texas/New Mexico producing area to El Paso, while Gulf owned the largest share of the West Texas Gulf Pipeline running from the producing area to the Gulf Coast and the MidValley Pipeline at Longview, TX. Chevron/Gulf (1984), Complaint ¶¶ 38-39.

[40] Texaco/Getty (1984), Complaint ¶¶ 15-59.

[41] At this time pipeline transport from the Gulf Coast was not considered to be in the relevant market for “the manufacture of refined light products.” Texaco/Getty (1984), Complaint ¶¶ 19-21.

[42] Texaco owned 14.3% of Colonial Pipeline, “the dominant means of transporting additional refined light products into the Northeast region, supplying approximately 36.9 percent of total consumption . . . in 1982.” Getty owned 100% of the Getty Eastern Products Pipeline. Texaco/Getty (1984), Complaint ¶¶ 33-35.

[43] Texaco owned 40% of the Wyco Pipeline, one of four pipelines delivering refined product to Colorado, while Getty owned 50% of the Chase Pipeline. Texaco/Getty (1984), Complaint ¶¶ 29-31.

[44] Both Texaco and Getty owned refineries and proprietary pipeline systems in the relevant market. While Texaco produced less heavy crude oil than it could refine, Getty produced more than it could refine on the West Coast. The Complaint alleged that the merger was “likely to increase Texaco’s incentives and ability to deny non-integrated refiners heavy crude oil and access to proprietary pipelines.” Texaco/Getty (1984), Complaint ¶¶ 50-57.

[45] Gulf/Cities Service (1982), Complaint for a Temporary Restraining Order and Preliminary Injunction Pursuant to Section 13(b) of the FTC Act (“Gulf/Cities Service Complaint”), ¶¶ 19-22. 1982 Merger Report.

[46] Gulf and Cities Service owned 16.78% and 13.98%, respectively, of Colonial Pipeline. Since the merged firm’s share would exceed 25%, it would be able to unilaterally block future pipeline expansion under the pipeline’s rules. Gulf/Cities Service Complaint ¶ 19.

[47] Mobil/Marathon (1981), Memorandum of Points and Authorities in Support of the Federal Trade Commission’s Complaint for Temporary Restraining Order and for Preliminary Injunction (“Mobil/Marathon Complaint Memorandum”) 6, 26-27. 1982 Merger Report.

[48] While the theories of anticompetitive effects were not always clearly articulated in the earliest petroleum merger investigations, a careful reading of the complaint and accompanying materials suggests the type of effects the investigators had in mind. The classifications of theories for these early cases listed in this table are therefore based in part on the authors’ interpretation of the complaints, court documents, and staff case memoranda. In the case of Mobil and Marathon, the merger would “enhance Mobil’s market power” in the relevant markets by “doubling and tripling its share,” (Mobil/Marathon Complaint Memorandum 26, 29) suggesting a likelihood of unilateral anticompetitive effects, and that it would increase concentration in already concentrated markets and remove a firm that had tended to act as a maverick, pricing aggressively and selling large volumes to independent retailers (Mobil/Marathon Complaint Memorandum 29-30) – pointing toward a theory of coordinated effects.

[49] The Complaint alleged that the firms’ combined shares of wholesale gasoline sales exceeded 24.5% in eighteen SMSAs, reaching 44.0% in one city and 49.4% in another. While HHIs were not calculated at that time, the parties’ contribution to HHI (that is, the sum of their squared shares) can be calculated from the market share data given (Mobil/Marathon Complaint Memorandum 27, Table 1). The parties’ pre-merger contribution to HHI ranged between 500 and 1,000 for ten of the eighteen SMSAs and exceeded 1,000 for another three.