Senate Democrats Call for Antitrust Investigation into ExxonMobil and Chevron Acquisitions

Senate Majority Leader Chuck Schumer, along with 22 Democratic senators, has sent a letter to the Federal Trade Commission (FTC) urging the regulator to investigate the proposed acquisitions by ExxonMobil and Chevron. Concerns have been raised regarding the impact of these deals on competition in the energy sector. The senators argue that allowing Exxon and Chevron to further integrate their operations could harm competition, potentially leading to increased consumer prices and reduced output across the United States.

The letter emphasizes the substantial profits earned by Exxon and Chevron in 2022, totaling $56 billion and $36.5 billion respectively. The senators also highlight the significant increase in gas prices since the height of the COVID-19 pandemic in April 2020. Despite not explicitly mentioning the impact of Russia’s war against Ukraine on energy markets, the senators align with President Biden’s call for an investigation into potential price gouging within the oil industry. They argue that such price surges cannot be solely attributed to increased production costs or inflation, especially considering the staggering profits of these companies.

Additionally, the Democratic senators express concerns about the corporations’ political influence and their ability to spend large sums on lobbyists to obstruct climate legislation and undermine environmental regulations. They claim that the proposed acquisitions would further enhance the companies’ political power and allow them to mislead consumers and discredit climate science. The senators suggest that the FTC’s intervention is necessary to prevent the fossil-fuel industry from subverting democratic processes.

Furthermore, the letter raises objections to the consolidation of the energy industry through past mergers and acquisitions involving Exxon and Chevron. The senators argue that the FTC should investigate whether these conglomerates should be broken up to promote competition.

The signatories of the letter include prominent senators such as Amy Klobuchar, who chairs the Senate Judiciary Committee’s antitrust panel, and Elizabeth Warren, a renowned antitrust advocate. Notably, some Democratic senators up for re-election in swing states in 2024 did not sign the letter.

Chevron’s acquisition of Hess and ExxonMobil’s acquisition of Pioneer are expected to close in early 2024. Chevron’s acquisition has been unanimously approved by both companies’ leadership boards, pending regulatory approval. ExxonMobil’s acquisition will bolster its presence in the Permian Basin, while Chevron aims to broaden its portfolio with access to the Stabroek block in Guyana and Hess’ Bakken assets.

In response to the letter, ExxonMobil stated that the combined companies represent only 5% of U.S. oil production, alleviating concerns about competition. The company also highlighted the potential benefits of the merger in terms of increased energy independence and lower emissions.

At the time of writing, Chevron has not provided a comment on the matter.