Competitive Impact of the Emerging Energy Company

by Reed Moyer



The article focuses on competitive impact of the emerging energy company. Public attention is increasingly being directed to problems relating to the energy industries. The problems fall into several categories, short- and long-run supply availability, the threat of sharply higher fuel prices, environmental concerns stemming from increasing energy consumption, and the balance of payments and national security implications of a potential heavy reliance on petroleum imports from the Middle East. Most major energy producers confined their activity to a single fuel or, in the case of petroleum firms, to two fuels-oil and natural gas. It has been found that energy firms are expanding into the production and reserve holdings of several fuels. Petroleum companies are the most prominent exponents of interfuel diversification. Whether the trend toward creating energy companies may adversely affect competition and call for antitrust action depends on a number oil factors including substitutability of fuels in various end uses, the degree of concentration that has resulted from interfuel mergers and acquisitions, the effect of this development on entry conditions in different energy source industries.

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