Senate Majority Leader Chuck Schumer and 22 other Democratic senators are calling on the Department of Justice to “use every tool” at its disposal to prevent and prosecute alleged collusion and price-fixing in the oil industry.
In a letter Thursday to Attorney General Merrick Garland and other officials, the Democrats said a recent Federal Trade Commission investigation into a high-profile merger uncovered evidence of price-fixing by oil executives that led to higher energy costs for American families and businesses.
The FTC said earlier this month that Scott Sheffield, the former CEO of Pioneer Natural Resources, colluded with OPEC and OPEC+ to potentially raise crude oil prices. Sheffield retired from the company in 2016 but returned as CEO in 2019. After retiring again in 2023, he continued to serve on its board.
The FTC cleared Exxon Mobil’s $60 billion deal to buy Pioneer on May 2 but barred Sheffield from joining the new company’s board of directors. Pioneer, which is based in Dallas, said it disagreed with the allegations but would not impede closing of the merger, which was announced in 2023.
In a report, the FTC said collusion by Pioneer and others may have cost the average American household up to $500 per car in increased annual fuel costs, an amount Democrats called “an unwelcome tax that is particularly burdensome for lower-income families.” Meanwhile, Exxon Mobil and other major oil companies collectively earned more than $300 billion in profits over the last two years, “a surge that many market experts believe cannot be explained away by increased production costs from the (coronavirus) pandemic or inflation,” Democrats said.
The letter calls for the Justice Department to launch an industry-wide investigation into possible violations of the Sherman Antitrust Act. It outlined how “Big Oil’s alleged collusion with OPEC is a national security concern that aids countries looking to undermine the U.S.,” including Russia and Iran.
“Corporate malfeasance must be confronted, or it will proliferate,” the letter said. “These alleged offenses do not simply enrich corporations; hardworking Americans end up paying the price through higher costs for gas, fuel and related consumer products. The DOJ must protect consumers, small businesses and the public from petroleum-market collusion.”
A spokeswoman for the American Petroleum Institute, the largest lobbying group for the oil and gas industry, said officials “don’t know the details of the FTC’s allegations against one individual,” Sheffield, but added: “The reality is that U.S. producers answered the call to meet growing energy demand, despite a spate of inflationary policies from this administration that threaten our long-term energy security.”
The United States is the largest crude oil producer in the world. “American energy production has been a stabilizing force for consumers here at home and around the world, especially in the face of supply cuts from OPEC,” institute spokeswoman Andrea Woods said.
The letter by Senate Democrats was the latest in a series of partisan actions targeting the oil industry.
Last week, Democrats launched a separate investigation into what they say oil executives may have promised or been promised at an April dinner with former President Donald Trump, who reportedly asked the executives for $1 billion in campaign donations in return for reversing scores of environmental rules and policies by President Joe Biden, including an end to the Democrat’s freeze on new liquefied natural gas export terminals. Trump, the presumptive Republican nominee for president, also reportedly said he would preserve or enhance tax benefits for the oil and gas industry in what Democrats called a “policies-for-money transaction.″
Trump campaign spokeswoman Karoline Leavitt said in a statement Thursday that Trump “is supported by people who share his vision of American energy dominance to protect our national security and bring down the cost of living for all Americans.”
Separately, Democratic Sen. Sheldon Whitehouse of Rhode Island and Democratic Rep. Jamie Raskin of Maryland have formally asked the Justice Department to investigate whether Exxon, Chevron and other oil companies misled the public over decades about the climate effects of burning fossil fuels. Whitehouse and Raskin led a multiyear investigation that uncovered what they described as “damning new documents that exposed the fossil fuel industry’s ongoing efforts to deceive the public and block climate action.”
Republicans, meanwhile, have attacked Biden’s energy policies, including the pause on new LNG exports, restrictions on new oil and gas leasing on a petroleum reserve in Alaska and a decision to charge companies higher rates to drill for oil and natural gas on federal lands.
Wyoming Sen. John Barrasso, the top Republican on the Senate Energy Committee, said Biden was “doing all he can to make it economically impossible to produce energy on federal lands.”
The letter released Thursday was signed by 23 Democrats, including Schumer, Whitehouse, Senate Commerce Committee Chairwoman Maria Cantwell of Washington state and Senate Judiciary Committee Chairman Dick Durbin of Illinois.
(AP)
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One Response
The oil companies would love to expand the supply of oil, but the Democrats are not letting them (allegedly for environment reasons). Hopefully President Trump and a Republican Congress can authorize, by statute, the drilling permits, pipelines and refineries to get oil prides to fall.