Senate Majority Leader Chuck Schumer and 22 other Democratic senators are calling for an investigation into the multibillion-dollar acquisitions by oil giants ExxonMobil and Chevron. They argue that these deals could result in higher gas prices. In a letter to the Federal Trade Commission (FTC), the lawmakers expressed concerns that Exxon’s proposed $60 billion acquisition of Pioneer Natural Resources and Chevron’s proposed $53 billion purchase of Hess Corp. may violate antitrust law. The senators believe that these deals could harm competition, leading to increased consumer prices and reduced output across the United States. They also highlighted the potential negative impact on small operators and wages.
The letter was signed by 23 senators, including Amy Klobuchar, chair of the Judiciary Committee’s antitrust panel, as well as antitrust advocates Elizabeth Warren and Bernie Sanders. While some argue that the global market for oil and gas is too large for dominant firms like Exxon and Chevron to restrict global capacity, the senators emphasized the need for the FTC to consider how these companies’ vertically integrated operations could harm American competition.
The FTC confirmed receiving the letter but did not provide further comment. Chevron, Exxon, and other oil companies have reported significant profits due to strong energy prices and demand following Russia’s invasion of Ukraine in February 2022. Exxon stated that the proposed acquisition of Pioneer Resources would enhance U.S. energy security and benefit the American economy and consumers. Chevron argued that its proposed deal with Hess would improve long-term performance, delivering higher returns and lower carbon dioxide emissions.
Both deals require approval from federal regulators. Environmental groups applauded the senators’ call for an investigation, expressing concerns about the consolidation of power within the oil industry and its potential impact on competition. However, the American Petroleum Institute, the oil industry’s leading lobbying group, argued that the mergers would increase production and improve environmental performance.
Schumer and other Democrats previously targeted the oil industry in an unsuccessful attempt to grant the FTC greater authority to crack down on price gouging. They argued that the FTC needs more tools, such as stiffer fines and penalties, to monitor markets and combat price gouging. Although a bill addressing price gouging was not approved in the last Congress, a similar bill is currently pending before the Senate Commerce, Science, and Transportation Committee.
