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Competition in the U.S. Energy Industry
Chicago area. Our data is revealing in this respect. The top two
recipients of crude oil from the Gulf Coast are Texas and
Louisiana; however, the third and fifth largest recipients are
Illinois and Indiana, respectively, while New Jersey and
Pennsylvania are seventh and ninth. The largest recipient of
foreign crude oil is California while the second through fourth
largest are Pennsylvania, New Jersey, and New York. Thus,
refineries in the midwest are heavily "dependent" on domestic crude
while coastal refineries obtain roughly half their receipts of
crude oil from foreign sources. These considerations, together with
the fact that a market based on Gulf Coast production is
geographically distinct only under the weak form of our test,
impels us to conclude that the market for crude oil is
international.
Examination
of data on coal shipments revealed a tendency for the scope of
geographic markets to increase. This trend toward increased
geographic scope is "artificial" to the extent it has been induced
by antipollution requirements. Nonetheless, such requirements have
induced or augmented changes in transportation capabilities which
will remain even if air pollution standards are relaxed. Finally,
the market for coal is regional only under the weak form of our
tests. For these reasons we offer the tentative conclusion
that the industries comprising the energy (input)
sector—uranium, gas, oil, and coal—are (at least)
national in scope.
NOTES
(Numbers in brackets refer to references, p. 217.)