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Topic: Ethanol
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| Agency: Federal Trade Commission
Date: 5 December 2006 [Non-automotive content removed.] |
The study also examines the possible effect on concentration of agreements between ethanol producers and marketers. By attributing producers’ market shares to marketers when producers use third-party marketers to sell their ethanol downstream, the staff was able to derive alternative estimates of market concentration. The staff also was able to estimate market concentration using both capacity and production data, finding that production-based market concentration figures typically are higher than capacity-based figures. The study concludes that the level of concentration in ethanol production would not justify a presumption that a single firm, or a small group of firms, could wield sufficient market power to set or coordinate price or output levels. According to the staff, however, the results cannot preclude the possibility that future mergers within the industry may raise competitive concerns.
The study, which is available now on the Commission’s Web site and as a link to this press release, was submitted to Congress and the Administrator of the U.S. Environmental Protection Agency, as required by Section 1501(a)(2) of the Energy Policy Act of 2005, as codified at 42 U.S.C. § 7545(o)(10). The Commission vote to issue the study, which was prepared by the staff of the Bureaus of Competition and Economics, was 5-0. (FTC File No. P063000; the staff contact is John H. Seesel, Associate General Counsel for Energy, Office of the General Counsel, 202-326-2702.)