U.S. Senate Majority Leader Urges FTC Probe into Exxon and Chevron Megadeals
U.S. Senate Majority Leader Charles Schumer has called on the Federal Trade Commission (FTC) to investigate possible anti-competitive consequences resulting from recent multi-billion dollar acquisitions by oil and gas giants Exxon and Chevron. The acquisitions, which include Exxon’s proposed purchase of Pioneer Natural Resources and Chevron’s agreement to acquire Hess, have raised concerns about potential harm to competition in the industry. Let’s delve into the details.
Schumer’s Concerns
Schumer, a Democrat, expressed his concerns in a letter to the Federal Trade Commission, stating that the recent oil and gas deals are “likely to harm competition.” He argues that allowing Exxon and Chevron to further consolidate their extensive operations in the oil and gas fields could lead to increased consumer prices and reduced output across the United States.
Financial Flex Amid Shifting Industry
These acquisitions by Exxon and Chevron come as U.S. oil and gas companies continue to invest in fossil fuels, while their European counterparts shift their focus towards renewable energy sources. The deals are seen as a financial move by the U.S. companies, which have benefited from strong energy prices and demand following Russia’s invasion of Ukraine.
Echoes of Past Consolidation
Schumer notes that the oil industry witnessed significant consolidation in the late 1990s when Exxon, Shell, BP, and TotalEnergies merged with rivals, resulting in the creation of large integrated companies. This consolidation followed a collapse in oil prices that left many companies weakened. Schumer suggests that the FTC should explore past anti-competitive mergers among major oil conglomerates and consider whether these energy giants should be broken up once again.
Democratic Support for the Investigation
The letter sent by Schumer received support from several other Democrats who also signed it, indicating a broader concern among the party regarding potential anti-competitive practices in the oil and gas sector.
Conclusion
The call by Senate Majority Leader Charles Schumer for the FTC to investigate the recent megadeals by Exxon and Chevron reflects concerns about potential harm to competition in the oil and gas industry. As the FTC considers the possible anti-competitive implications of these acquisitions, the outcome could have significant implications for consumer prices and oil and gas output throughout the United States. Monitoring the developments of this investigation will be important to gauge the potential impact on the industry.
Source: https://www.hartenergy.com/exclusives/us-senator-schumer-urges-ftc-probe-exxon-chevron-megadeals-207046
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