FTC Conditions Irving Oil's Proposed Acquisition of ExxonMobil Assets in Maine

The Federal Trade Commission will require Irving Oil Terminals Inc. and Irving Oil Limited (collectively, Irving) to relinquish the rights to terminal and pipeline assets in Maine that Irving acquired from ExxonMobil, to maintain competition in gasoline and distillates terminaling services in the South Portland and Bangor/Penobscot Bay areas. The proposed settlement resolves the FTC’s charges that the acquisition is anticompetitive and could result in higher gasoline and diesel prices for consumers.

“We continue to closely monitor deals in the energy sector to ensure that consumers of petroleum products are served by competitive markets,” said FTC Bureau of Competition Director Richard Feinstein. “We expect the relief obtained here to accomplish that goal and protect consumers from higher gas prices.”

As the transaction was originally structured, Irving would have acquired ExxonMobil’s terminals in South Portland and Bangor as well as ExxonMobil’s intrastate pipeline connecting the two terminals. Terminals are critical to the sale and distribution of fuels, and they generally include storage tanks and loading “racks” that pump fuels into tanker trucks for delivery.

The original transaction, according to the FTC’s complaint, would have substantially increased concentration in certain geographic markets in Maine. Irving and ExxonMobil are two of only three firms that can independently offer or provide gasoline terminaling services in the Bangor/Penobscot Bay area, and two of only four in the South Portland area. Similarly, they are two of only four firms that can independently offer distillates terminaling services in the Bangor/Penobscot Bay area, and two of six in the South Portland area.

The FTC’s proposed order settles FTC charges by requiring Irving to give up its acquisition rights to ExxonMobil’s Bangor terminal and intrastate pipeline as well as 50 percent of ExxonMobil’s South Portland terminal to Buckeye Partners, L.P. and its affiliate Buckeye Pipe Line Holdings, L.P. (collectively, Buckeye). The proposed order allows Irving to participate in a joint venture with Buckeye created to acquire ExxonMobil’s South Portland terminal.

The proposed order is intended to ensure that the South Portland terminal will continue to operate independently of, and in competition with, other Maine terminals. To this end, it prevents Irving, without prior approval from the FTC, from acquiring additional shares in, managing, or operating the South Portland terminal. In addition, Irving must notify the FTC before it acquires any additional ownership interests in any petroleum products transportation or storage facilities in Maine. Lastly, the proposed order imposes firewall and monitor provisions to ensure that Irving does not access or use the joint venture’s confidential customer information.

The Commission vote approving the complaint and proposed settlement order was 5-0. The order will be published in the Federal Register subject to public comment for 30 days, until June 27, 2011, after which the Commission will decide whether to make it final. Comments can be submitted electronically here. The FTC thanks the Maine Office of the Attorney General, which also announced a settlement with the companies today, for its invaluable assistance in the matter.

NOTE: The Commission issues a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The issuance of a complaint is not a finding or ruling that the respondent has violated the law. A consent order is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.

Copies of the complaint, consent order, and an analysis to aid public comment are available from the FTC’s website at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust@ftc.gov, or write to the Office of Policy and Coordination, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook and follow us on Twitter.

(FTC File No. 101-0021)