Senate Majority Leader Chuck Schumer and 22 other Democratic senators are urging federal regulators to investigate the oil giants’ multibillion-dollar acquisitions. ExxonMobil And Chevronsaying the deals could lead to higher prices at the pump.
In a letter to the Federal Trade Commission on Wednesday, lawmakers said Exxon’s proposed $60 billion acquisition of Pioneer Natural Resources And The proposed purchase of Hess Corp. by Chevron for $53 billion. are two of the largest oil deals in U.S. history and could violate antitrust law.
“These agreements are likely to harm competition, potentially raising consumer prices and reducing production in the United States,” the senators wrote. These agreements threaten to harm small farmers and suppress wages, they added.
The letter is signed by 23 senators, including Minnesota Sen. Amy Klobuchar, chair of the Judiciary Committee’s antitrust panel, and antitrust hawks such as Sens. Elizabeth Warren of Massachusetts and Bernie Sanders of Vermont.
While its supporters argue that the global oil and gas market is so large that even dominant companies like Exxon or Chevron cannot constrain global capacity, “the FTC must consider how the vertically integrated operations of Exxon or Chevron can harm American competition despite the global situation. market,” the senators wrote.
An FTC spokesperson said the agency received the letter but declined further comment.
Chevron, Exxon and other oil companies have reported huge profits thanks to strong demand and energy prices since Russia’s invasion of Ukraine in February 2022. Exxon reported $9.1 billion in profit in the quarter ended September 30. while Chevron reported $6.5 billion in profits.
Exxon said in a statement that the proposed deal with Texas-based Pioneer Resources would strengthen U.S. energy security and benefit the U.S. economy and consumers.
“For anyone worried about competition, the fact that the two companies together account for about 5% of U.S. oil production should reassure them. For all those seeking greater U.S. energy independence and significantly lower emissions, this merger is nothing but a win-win for our economy and environment,” the company said.
Chevron said its proposed deal with the New York-based company Hesse would strengthen long-term performance while “producing higher yields and reducing carbon dioxide emissions” that contribute to global warming.
Both deals must be approved by federal regulators.
Environmental groups have welcomed the call for an investigation into what some call “merger madness” within the oil industry that threatens competition.
“The growth of Big Oil poses a threat to our climate and our democracy,” said Lukas Ross, senior program director at Friends of the Earth. “The proposed mergers would strengthen the outsized political power of Exxon and Chevron, allowing them to block another generation” of greenhouse gas emissions that contribute to global warming, he said. “The FTC has every reason to act.”
A spokeswoman for the American Petroleum Institute, the oil industry’s main lobbying group, said the proposed mergers would increase production and improve environmental performance.
“Instead of focusing on outdated partisan arguments, we should focus on protecting America’s energy security at a time of global unrest and removing regulatory barriers that harm consumers,” said Bethany Williams of API.
Schumer and other Democrats also targeted the oil industry last year, after unsuccessfully trying to give the FTC greater power to crack down on companies that engage in price gouging. Responding to Concerns About High Gas Prices, Democrats Said FTC Needs More Toolsincluding tougher fines and penalties and a dedicated team of experts to monitor markets and combat price gouging.
A bill to combat price gouging was not approved in the last Congress. A similar bill is pending before the Senate Commerce, Science and Transportation Committee.