Lynne Kiesling
ChevronTexaco has purchased Unocal, which will give them access to Unocal’s valuable oil and natural gas holdings. Note that this does little, if anything, in the short run to increase exploration activity or the aggregate amount of energy reserves. If the merger leads to some economies of scale and/or scope, then the probability of increased exploration from the merged firm increases.
Yes, scope. Unocal un-vertically-integrated about a decade ago, selling its retail and refining operations and concentrating on its exploration and drilling.
The article also obliquely refers to Unocal’s most recent attention-grabber: its role in shaping emission policy and the federal fuel oxygenate requirement.
Unocal still holds a patent claim on a formula for making cleaner burning gasoline first introduced in California and now sold in other states.
There’s a long story, for another day, involving Unocal’s role in the legislation that ultimately got passed.
The Los Angeles Times had an article on the sale today, which I excerpted a bit on my blog. You and I might disagree on the conclusions — many economists believe resources grow to meet demand, or induce substitution, etc. — but I’m fairly well convinced (hence the title of my blog) that in the short-to-medium term, we’re in for shortages and high prices, not to mention possible wars all over the world. The oil companies haven’t been able to reverse depletion in the U.S., and I doubt they’ll be able to do it globally.