The Senate Antitrust and Monopoly Subcommittee this week opens hearings on legislation which would bar major oil companies from owning or controlling any coal for uranium resources.
The measure, introduced last week by subcommittee chairman Edward M. Kennedy (D-Mass.) and ten co-sponsors, is similar to a measure debated by the subcommittee in 1975. But some Senate sources, pointing to recent legislative defeates suffered by the oil industry during Senate debate on legislation about the outer continental shelf, give the new measure a much greater likelihood of success in this Congress.
The measure would prohibit immediately any major petroleum producer from acquiring further interest in coal or uranium assets, and would require divestiture within three years of assets currently owned.
Introducing the measure, Kennedy delivered a spirited attack on the oil industry, calling into question its record in oil and gas as well as its performance with the coal reserves it currently holds.
"The basic theory underlying the bill is not complicated or difficult to understand," Kennedy said. "It is that firms engated in one line of business ought not to be able to hold or acquire firms engaged in a competing, or potentially competing, line of business.
"This theory does not rely on regression analyes or econometric models; it relies on common sense," he said.
Big oil companies already control the "lions' share" of the petroleum market place, with eight of them controlling two-thirds of U.S. industries' assets and earning three-fourths of oil industry profits, he said.
Recently, they have been moving into coal and uranium, he complained, posing "an obvious conflict of interest" as the nation moves to convert industry and utilities from a relience on oil and gas to coal - a prime administration goal.
In 1965, the only major coal company controlled by an oil company was Gulf Oil's Pittsburgh Midway subsidiary, Kennedy said. Ten years later-eight coal producers controlled by oil companies had more than 20 per cent of the nation's production. Looking at reported, privately-owned reserves, which some believe may be more important than current production, the oil industry holds between 35 and 40 per cent of total reserves, he added.
Oil companies have not done well with what they have now, Kennedy charged, noting that figures supplied by Exxon Corp. show that the five of the eight with coal production in 1970 produced nearly 114 million tons, which dropped by 18 per cent to 94 million tons in 1975. At the same time, the rest of the industry had expanded production by 13 per cent.
Without a more competitive, industry. Kennedy worried that in the future the prices of all fuels in the United State could become lined to the monopoly price established by the OPEC cartel. Decrying the oil industry's growth into coal, Kennedy said, "what we want is to halt this growth before the ernegy market is unified and the power to eliminate interfuel competition has become an incontrovertible fact."
He rejected the oil firm's arguments that they during needed capital, managerial expertise and research and development capability to the coal industry. "The record simply does not give us any reason to believe that oil companies can do a better job - or even as good a job - as other owners of coal resources when it comes to actually producing coal to meet this country's energy needs," he said.