American Democrats call for an investigation into the price collusion of Big Oil, ET EnergyWorld

Washington: Senate Majority Leader Chuck Schumer and nearly two dozen Democrats on Thursday asked the Justice Department to investigate the oil and gas industry over allegations of price fixing.

The senators pointed to an investigation by US antitrust authorities into the high-profile merger, which found evidence of anti-competitive practices by oil company executives aimed at increasing fuel costs for Americans.

“These reports are alarming and lend credence to concerns that corporate greed is keeping prices artificially high,” Democrats wrote in a letter to Attorney General Merrick Garland.

Schumer and his colleagues urged Garland to “use every tool” to prevent and prosecute price fixing, which they said could increase the costs of gasoline, diesel, heating oil and jet fuel “in a way that has materially harmed virtually every U.S. household and enterprise.

The letter came as Democrats step up their confrontation with so-called “big oil” over high prices and greenhouse gas emissions as the November presidential election approaches.

In early May, the Federal Trade Commission approved ExxonMobil’s $60 billion takeover of leading Texas oil producer Pioneer Natural Resources, but accused Pioneer CEO Scott Sheffield of colluding with the OPEC+ group of countries to raise prices.

Regulators pointed to numerous private conversations and hundreds of text messages between Sheffield and OPEC officials in which the CEO discussed prices and production and assured them that Pioneer was working to keep supplies low.

Schumer and his colleagues have argued that industry collusion may have contributed to a sharp decline in U.S. oil production, causing gas prices to rise 94 cents a gallon since the pandemic began.

“This means that the collusion by Pioneer and its associates could have cost the average American household up to $500 per car in increased annual fuel costs – an unwelcome tax that is particularly burdensome for lower-income families,” they said.

After the takeover, the FTC banned Sheffield from serving on Exxon’s board, but the senators said that “only the Department of Justice can prosecute and fully redress alleged anticompetitive conduct in the oil sector.”

Price fixing findings can result in penalties of up to $1 million and 10 years in prison for individuals and $100 million for companies.

Sheffield claims the FTC mischaracterized facts and evidence to “publicly and unjustifiably” smear him.

“His case is based on a false narrative about these statements and a far-fetched interpretation of applicable statutes,” his lawyers wrote in a federal filing earlier this week.

Pioneer said the FTC’s complaint reflected a “fundamental misunderstanding of the U.S. and global oil markets” and that Sheffield’s motivation was to empower domestic energy producers to enhance U.S. energy security.