Senate Majority Leader Chuck Schumer (D-N.Y.) and 22 other Democratic senators are urging federal regulators to investigate two recent multibillion-dollar acquisitions by oil giants ExxonMobil and Chevron, saying the deals could lead to higher prices at the pump.
In a letter Wednesday to the Federal Trade Commission (FTC), the lawmakers said Exxon’s proposed $60 billion acquisition of Pioneer Natural Resources and Chevron’s proposed $53 billion purchase of Hess Corp., two of the largest petroleum deals in U.S. history, could violate antitrust law.
“These deals are likely to harm competition, risking increased consumer prices and reduced output throughout the United States,” the senators wrote.
The letter was signed by 23 Democratic senators, including Sen. Amy Klobuchar (Minn.), chair of the Judiciary Committee’s antitrust panel, and antitrust hawks such as Sens. Elizabeth Warren (Mass.) and Bernie Sanders (Vt.).
Chevron, Exxon, and other oil companies raked in huge profits this year—partly due to international embargos on Russian oil and gas that sent prices skyrocketing in 2022, and partly because of rising inflation.
Environmental groups hailed the Democrat’s call for an investigation of what some are terming “merger mania” within the oil industry.
“Big Oil getting bigger is a threat to our climate and our democracy,” said Lukas Ross, senior program manager at Friends of the Earth.
“The proposed mergers would supercharge Exxon and Chevron’s outsized political power, allowing them to lock-in another generation of planet-warming greenhouse gas emissions,” he said. “The FTC has every reason to act.”
Both companies downplayed the concerns over the recent acquisitions.
“For all those concerned about competition, the fact that the two companies combined represent about 5 percent of U.S. oil production should set their mind at ease,” Exxon said in a statement regarding its deal with Texas-based Pioneer Resources. “For all those who seek even greater U.S. energy independence and far lower emissions, this merger represents nothing but upside for our economy and our environment.”
Chevron said its proposed deal with New York-based Hess Corp. would strengthen its “long-term performance,” while “delivering higher returns” and lowering carbon emissions.
Once the deals have been finalized, they will need to be approved by federal regulators.
The acquisitions come at a time when a number of major European energy companies—including BP, Shell, and Total Energies—are upping their investments in renewable energies. The acquisitions, which both take advantage of the booming Guyana oil fields, demonstrate the companies’ conviction that the demand for fossil fuels will remain high in the coming decades.
“Instead of focusing on stale partisan talking points, we should focus on protecting America’s energy security at a time of global unrest and lifting regulatory barriers that are hurting consumers,” said Bethany Williams, a spokeswoman for the American Petroleum Institute.
Last year in March, around the time when the U.S. embargo on Russian oil was instated, Mr. Schumer and other Democrats made a bid to increase the FTC’s authority to crack down on companies that engage in price gouging. The bill failed, and legislation to tackle price gouging was not approved in the last Congress. However, a similar bill is pending before the Senate Commerce, Science, and Transportation Committee.
The Associated Press contributed to this article.