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Statement in Opposition to Exxon-Mobil Merger

Public Citizen opposes the Exxon-Mobil merger because it would be harmful to consumers, workers, the environment, the economy and our political democracy.

The corporate marriage between these two large pieces of the former Standard Oil trust would create the largest corporation in the world. There is every indication, based on an examination of the history of the oil industry, that this marriage between two oil and drilling titans would lead to anti-competitive behavior, especially in the many areas where Exxon and Mobil now compete head to head.

In 1909 when a federal judge ordered the dissolution of Standard Oil for conspiring to constrain trade, the Octopus, as it was known at the time, controlled 85% of the oil market. President Teddy Roosevelt said triumphantly that the decision "was one of the most signal [sic] triumphs for decency which has been won in our country." We should learn from the lessons of the past. Mergers lead to consolidation, which means fewer competitors and eventually higher prices for consumers.

However, anti-competitive behavior is not the only problem. The merger would create an oil giant with enormous political power. United, these two corporate giants would have an even greater ability to skew critical policy debates over matters such as labor standards, global climate change, oil and gas exploration in pristine areas, government support for renewable energy and energy efficiency technologies, and corporate tax subsidies.

The oil and gas industry already uses their economic resources to subvert public policy. According to the Center for Responsive Politics, the oil and gas industry contributed $6,321,473 in political action committee (PAC) contributions to federal candidates in the 1998-election cycle. Of this amount, 21% went to Democrats while Republicans collected 79%.

Exxon Corporation’s PAC was second largest, and Mobil Oil’s PAC placed fourth. In the1998 Congressional election cycle, Exxon's PAC contributed $482,900 to federal candidates (94% to Republicans) while Mobil's PAC chipped in $237,250 (88% to Republicans).

However, campaign contributions were small in contrast to the amount of money that these corporations spent on lobbying activities. In 1997 alone, the oil and gas industry spent $62 million dollars on lobbying with Exxon and Mobil each spending over $5 million dollars. This is an enormous amount of money and its influence on our democratic process is shameful.

Approval of the Exxon-Mobil merger should not move forward. It would also encourage other mergers in the oil industry, further concentrating power and intensifying the remaining firms' oligopolistic pricing power. The result would be even less responsiveness to public demands for corporate responsibility.

We recommend the following actions:

Congress should hold both regional hearings on the merger and hearings in communities that would be affected the most.

Congress should hold hearings in both the Senate and the House to explore the implications for consumers, the environment and workers.

The Federal Trade Commission should block the merger.

The Senate Foreign Relations Committee and the House International Relations committees should hold hearings on human rights abuses associated with Exxon and Mobil's overseas operations.

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