New York Democrat and Senate Minority Leader Chuck Schumer and 21 other senators have asked the Federal Trade Commission to investigate the massive merger between Chevron and ExxonMobil. There is worry that this could reduce competition in the energy market.
Schumer and almost two dozen Senate Democrats voiced their disapproval of two pending mega-mergers involving energy sector giants: Exxon’s proposed $60 billion acquisition of Pioneer Natural Resources and Chevron’s proposed $53 billion acquisition of Hess Corporation.
Democratic senators worry that allowing Exxon and Chevron to expand their operations in necessary oil and gas fields will have a negative influence on competition, resulting in higher costs for consumers and lower output across the United States. Regional agreements may have a chilling effect on small businesses and wage growth.
The letter was written in response to the two energy corporations’ huge earnings in 2022. Comparatively, Chevron’s profits were $36.5 billion, while Exxon’s was $56 billion. During the COVID pandemic’s lowest point in demand in April 2020, senators from the Democratic party noted that gas prices had risen from $1.84 per gallon to $4.93 by June 2022 and were still relatively high at $3.84 per gallon today. They didn’t talk about how the Russian invasion of Ukraine in February 2022 has affected the energy sector.
The Democrats warned in their letter that the proposed transactions will give big businesses even more political sway. They might use the money to hire lobbyists who would work to derail climate legislation, challenge environmental rules in court to weaken them, and participate in a concerted campaign of misinformation aimed at fooling consumers and discrediting climate science. They are taking these measures to protect their already significant earnings.
The Democrats in the Senate have said that the fossil fuel sector can’t undermine democracy because of the FTC’s efforts to increase competition.
They were also worried about Exxon and Chevron merging and monopolizing the energy market in the 1990s and early 2000s. They said the FTC should look into the companies’ previous mergers to see if ExxonMobil and Chevron should be split up again.
The letter was signed by a bipartisan group of senators, including the chair of the Senate Judiciary Committee’s antitrust section, Amy Klobuchar (D-MN), and Elizabeth Warren (D-Massachusetts), who is also well-known for her stance on antitrust matters.