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Competition in the U.S. Energy Industry







(1) large-scale mergers would fall beyond the range of the data used to estimate the Salamon-Siegfried model and (2) the petroleum industry already appears to possess significant political influence and it is not clear if any marginal addition to that influence would have any significant effect. However, mergers of petroleum firms with coal and/or uranium firms may indeed have real political consequences. In such cases, the danger is that the political influence of petroleum firms will be transferred to these other areas. This possibility, while speculative, suggests that such mergers contain political consequences independent of any economic effects.

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i See Appendixes.

NOTES

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1. For a policy makers discussion of the problem in regards to the energy sector see: Statement of Dr. H. Michael Mann, Director, Bureau of Economics Federal Trade Commission before the Subcommittee on Anti-trust and Monopoly, June 27, 1973.

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2. Various estimates of the cost of these policies are available. See: M.A. Adelman, "Efficiency of Resource Use in Petroleum," Southern Economic Journal, October 1965, p. 105; W.F. Lovejoy and P.T. Homan, Economic Aspects of Oil Conservation Regulation (Baltimore: The Johns Hopkins Press, 1967), and Cabinet Task Force on Oil Import Control, The Oil Import Question (Washington: Government Printing Office, February 1970); Charles Chicchetti and Wm. Gillen, "The Mandatory Oil Import Quota Program: A Consideration of Economic Efficiency and Equity," Natural Resources Journal, 1973.

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3. E. Mansfield, Industrial Research and Technological Innovation (New York: W.W. Norton, 1968).

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4. John Enos, Petroleum, Progress, and Profits (MIT Press, 1962), p. 234.

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5. Rankings were obtained from five R&D executives in the petroleum industry and seven professors of chemical engineering at major universities. Close agreement as to rankings occurred.

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6. Natural Science Foundation, Research and Development in Industry for 1960, 1963, 1966, and 1969, Washington.

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7. John Enos, "Invention and Innovation in the Refining Industry," The Rate and Direction of Inventive Activity, National Bureau of Economic Research, 1962.

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8. Edwin Mansfield, Industrial Research and Technological Innovation (New York: W.W. Norton, 1968).

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9. D.L. Baeder, "Research and the Emperor's New Clothes," paper given at the Sixth Industrial Affiliates Symposium, Stanford University, May 15, 1973.

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10. Ibid.

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11. See: Coal Age, October 1972, p. 139.

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12. Enos estimates an average lag of 11 years between invention and dillusion for major cracking processes but that the average lag in petroleum