Khanna, Schumer Lead Call for FTC Probe of Big Oil Consolidation

U.S. Congressman Ro Khanna and Senate Majority Leader Chuck Schumer on Wednesday led dozens of congressional colleagues in urging federal regulators to investigate the recent historic surge in oil and gas industry consolidation.

In a bicameral letter to Federal Trade Commission (FTC) Chair Lina Khan, the lawmakers took aim at what analysts say is the biggest-ever wave of Big Oil mergers and acquisitions (M&A), which totaled a staggering $190 billion last year, including $144 billion worth of industry consolidation in the fourth quarter alone.

"Contrary to disinformation spread by industry groups, these deals are not about efficiency, international competitiveness, or lowering costs; they are designed to pump more profits out of Americans' pockets—plain and simple," the letter led by Khanna (D-Calif.) and Schumer (D-N.Y.) states. "Fossil fuel companies have overwhelmingly identified investor pressure as the reason to keep prices high so they can continue to benefit from record profits. Americans are paying the price for Big Oil's greed and are still struggling to keep up with gas prices higher than pre-pandemic levels."

The lawmakers urged the FTC to "consider all harms that past and future mergers present to American consumers" and "oppose any acquisitions it determines to be in violation of antitrust law."

The FTC is currently investigating last year's megamergers involving Chevron and Hess, ExxonMobil and Pioneer, and Occidental Petroleum and CrownRock.

"Oil and gas is undergoing a historic consolidation wave comparable to what occurred in the late 1990s and early 2000s giving rise to the modern supermajors," Andrew Dittmar, a senior vice president at the analytics firm Enverus, said earlier this year. "After a decade of lowered investment in exploration and with the major U.S. shale plays largely defined, M&A has become the preferred tool to replace declining reserves and secure longevity in these companies' profitable upstream businesses."

The lawmakers' letter warns that "if a small group of dominant firms is allowed to control this industry, American consumers and industry competition will only suffer."

"Therefore, we urge the FTC to extend its current investigations, open inquiries into these new deals, and take all appropriate actions to protect competition in this industry," the letter adds. "Lax enforcement during the last generation, such as allowing Exxon and Mobil to merge, resulted in market manipulation, unstable supply, and price hikes for Americans. We must avoid similar mistakes going forward."

The letter is backed by advocacy groups including Food & Water Watch, Public Citizen, Friends of the Earth, Center for Biological Diversity, Indigenous Environmental Network, Greenpeace USA, Zero Hour, and Sierra Club.