243. See Hawaii, Department of the Attorney General, The Attorney
     General's 1994 Interim Report on the Investigation of
     Gasoline Prices (Honolulu:  1994) (hereinafter, "AG (1994)")
     at 5-6.

244. See U.S. Const., art. I, §8, cl. 3, giving Congress
     exclusive powers over interstate commerce.

245. Letter to researcher from Ted Gamble Clause, Deputy Attorney
     General, Department of the Attorney General, dated July 21,
     1995, at 2.

246. Letter from John Tantlinger, Ed.D., Energy Planner for the
     Department of Business, Economic Development, and Tourism,
     to Wendell K. Kimura, Director, Legislative Reference
     Bureau, dated June 13, 1995, at 2.

247. Director of the Hawaii Automotive & Retail Gasoline Dealers
     Association, dated July 1, 1995, at 3.

248. Letter to researcher from Alec McBarnet, Jr., Vice
     President, Hawaii Petroleum Marketers Association, dated
     July 7, 1995, at 2.

249. Letter to researcher from Jennifer A. Aquino, Administrative
     Manager, Aloha Petroleum, Ltd., September 21, 1995, at 2.

250. Letter to researcher from R. A. Broderick, Western Region
     Business Manager, Shell Oil Products Company, dated June
30,
     1995, at 4.

251. Letter to Wendell K. Kimura, Director, Legislative Reference
     Bureau, from Susan A. Kusunoki, Manager of State
     Governmental Activities, BHP Hawaii Inc., dated July 18,
     1995, at 2.

252. Letter from J. W. McElroy, Regional Manager, Chevron U.S.A.
     Products Co., to Wendell K. Kimura, Director, Legislative
     Reference Bureau, dated August 7, 1995, at 3.

253. Nancy D. Yamaguchi and David T. Isaak, Hawaii and the World
     Oil Market:  An Overview for Citizens and Policymakers
     (Honolulu:  East-West Center Energy Program, Aug. 1990) at
     73-74.

254. AG (1994) at 4-5; Hawaii, Department of the Attorney
     General, An Investigation of Gasoline Prices in Hawaii:  A
     Preliminary Report (Honolulu:  Sept. 1990) (hereinafter, "AG
     (1990)") at 11.

255. Yamaguchi and Isaak (1990) at 74.  This type of exchange
     agreement may be viewed as similar to reciprocal dealing,
     that is, "the sale or lease of a product on the condition
     that the seller purchase a different product from the
     buyer."  Herbert Hovenkamp, Federal Antitrust Policy:  The
     Law of Competition and its Practice (St. Paul, MN:  West
     Publishing Co., 1994) at 381.  While reciprocal dealing is
     often viewed as similar to tie-ins under antitrust law,
     reciprocal dealing may promote efficiency when entered into
     voluntarily rather than as the result of coercion.  Id. at
     381-384; E. Thomas Sullivan and Jeffrey L. Harrison,
     Understanding Antitrust and its Economic Implications, Legal
     Text Series, 2d ed. (New York, NY:  Matthew Bender, 1994) at
     201.

256. See AG (1994) at 4-13; see also AG (1990) at 11-12.  This
     section briefly summarizes a portion of the Attorney
     General's analysis.  Readers are referred to the original
     text of the Attorney General's 1994 interim report for a
     more extensive discussion of these issues.

257. AG (1994) at 9.

258. See also id. at 12:
     
             The question is whether prohibiting exchange
        agreements in Hawaii will lower Hawaii's gasoline
        prices.  If exchange agreements were not used in
        Hawaii, the cost of wholesale gasoline refined in
        Hawaii to the non-refiner would increase.  Under most
        models of oligopolistic interaction this would lead to
        an increase in the market price, not a decrease.  But
        such a result depends on (1) the barriers to entering
        Hawaii markets with mainland gasoline being
        insurmountable, or (2) the prospect of profits in the
        Hawaii markets not being attractive enough to justify
        anyone waging hostile price competition.

259. Id. at 11-14.

260. Id. at 14.

261. Id. at 16-17.

262. Yamaguchi and Isaak (1990) at 71-72.

263. Id. at 73.

264. See id. at 74-75:
     
             We do not feel that exchange agreements lead to
        price-fixing.  In the case of simple product swaps,
        price does not enter into the discussion.  In the case
        of more complex exchange agreements, the prices are
        almost always assessed against some external market
        price which neither party to the agreement plays a
        role in setting.  This is done for simple protection;
        neither party would be willing to expose themselves to
        [market] prices that the other party could influence.
        Most exchange agreements are linked to prices that
        anyone would agree are true "free-market" prices.
     
             Exchange agreements do not, in our opinion, lead
        to collusion on price; indeed, they tend to make this
        type of collusion more difficult.

265. Id. at 75.

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