Oil Antitrust Action

Report Outline
Fight to Break Up ‘Big Oil’
Industry's Search for Stability
Shift to New Forms of Energy
Special Focus

Fight to Break Up ‘Big Oil’

Current Attempts in Congress and FTC

A movement to break up the major American oil companies has been gaining strength over the last several years and is expected to test its power in Congress again this year. Department of Energy allegations late last year and early this year that the oil companies overcharged consumers during and after the 1973–74 Arab oil embargo helped revive the animosity that many people feel toward the oil companies.

Bills proposing both vertical divestiture (breaking up the big companies into separate businesses confined to drilling, transporting, refining or marketing oil, but not all of these operations together) and horizontal divestiture (breaking up the companies into businesses that develop only oil, coal, uranium or geothermal energy, but not all of these fuels) have come close to passage in recent sessions of Congress.

The close votes obviously have scared the oil companies. Their response has been to mount a well-financed public relations and lobbying campaign directed by the American Petroleum Institute in Washington, D.C. The anti-divestiture campaign is the API's No. 2 priority, second only to its effort to influence the shape of President Carter's national energy plan. The aim of the anti-divestiture campaign is to convince the public and Congress that breaking up “Big Oil,” as detractors and sometimes the petroleum industry itself calls the biggest companies, would weaken the American economy and make the energy situation even worse.