Battle over Big Oil Mergers Festers in Senate

Senate Democrats and Republicans are at loggerheads over recently announced mergers in the oil industry. 

Last year, reports emerged of  planned mergers between Exxon and Chevron with Pioneer Natural Resources and Hess Corporation, respectively.

Exxon and Chevron are the two largest oil companies in the United States.

Exxon has claimed the merger “represents an opportunity for even greater U.S. energy security by bringing the best technologies, operational excellence and financial capability to an important source of domestic supply, benefitting the American economy and its consumers.”

Similarly, Chevron Chairman and CEO Mike Wirth assured the merger focuses on “operating safely and with integrity, attracting and developing the best people, making positive contributions to our communities and delivering higher returns and lower carbon.”

However, Senate Democrats protested the mergers shortly after their unveiling. 

In a letter to the Federal Trade Commission (FTC), Democrats urged the FTC to “carefully consider all of the possible anticompetitive harms that these acquisitions present.”

According to the letter, increased consolidation of the oil and gas market has historically led to gasoline price increases. 

Democrats rejected claims that the merger would be insignificant for the global market and should therefore be permitted, arguing that the FTC should focus on the merger’s domestic impact.  

Additionally, Democrats noted potential climate concerns over the increased fossil fuel production resulting from the mergers. 

Conversely, Republicans sent a letter to the FTC countering the arguments made by the Democrats and supporting the oil mergers. 

Republicans, including US Senator Rick Scott (R-FL), allege Democrats are unduly attempting to influence the FTC through “misleading and false allegations.”

The Republicans’ letter requests the FTC conduct a “fair and unbiased standard grounded in sound economics and law that protects American consumers, and does not impose policy preferences to further political ends.”

The letter also emphasized the economic benefit American consumers will derive from the merger. 

“Since these two proposed transactions will significantly expand oil and gas production, the obvious economic consequence would be that costs to consumers should fall. That would be a welcome development for American families who are paying substantially higher energy prices because of Biden administration policies.”