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UpstreamOnline: Man with a plan: presidential hopeful Barack Obama

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Obama eyes active role in oil market

By Upstream staff

Democrat Barack Obama would take an active role in US oil markets as president, tackling concerns about the dominance of large oil companies and eyeing the Strategic Petroleum Reserve as a potential weapon to combat high prices, his top energy adviser said.

The presidential hopeful’s adviser, Jason Grumet, told Reuters an Obama administration would crack down on any competition lapses in the sector that have resulted from big corporate mergers and would consider releasing oil from the US strategic reserves as a way to bring down the cost of gasoline.

Fleshing out the Illinois senator’s energy and environmental policy goals, Grumet also said Obama would seek to link a future US carbon emissions trading system with the European Union’s scheme as soon as possible while focusing attention on China and India in forging a global warming pact.

Grumet, head of the Washington-based Bipartisan Policy Centre as well as an advisor to the Obama campaign, said the oil industry had “concentrated incredible market power in a small number of companies” in a way that caused alarm.

“Senator Obama has a deep concern that the consolidation of the industry – these national mergers, you know, that were allowed under both Clinton and Bush administrations – are a cause for some concern,” he told Reuters.

He said an Obama administration would examine “whether these mergers and consolidations have decreased competition in a way, concentrated market power in a way, that is undermining to consumers”.

Grumet declined to identify specific companies and would not comment on whether Obama would seek to break up dominant players, including ExxonMobil, Chevron and ConocoPhillips.

“It is premature to try to articulate what the remedy is,” Grumet said. “There are indications that there could be some problems there and…the (Bush) administration has been a bit asleep at the switch, so we would be digging into those questions aggressively.”

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20 March 2008 13:24 GMT  | last updated: 20 March 2008 13:35 GMT

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