Two dozen Senate Democrats on Thursday renewed calls for the oil industry to be investigated for the possibility of collusion and price fixing, this time by Attorney General Merrick Garland.
The latest endeavor comes after the Federal Trade Commission greenlighted a $64.5 billion Exxon Mobil merger with Pioneer Natural Resources but said Pioneer’s former CEO engaged in “collusive activity” with OPEC and OPEC+ “that would potentially raise crude oil prices.”
The move from Senate Democrats, which includes several members facing tough reelections this fall, also comes as Senate Majority Leader Chuck Schumer (D-NY) shifts to an election-year agenda that includes messaging bills on other hot-button issues like border security and contraception.
“The federal government must use every tool to prevent and prosecute collusion and price fixing that may have increased gasoline, diesel fuel, heating oil, and jet fuel costs in a way that has materially harmed virtually every American household and business,” the Democrats wrote in a letter to Garland and Assistant AG Jonathan Kanter. “We therefore urge the Department of Justice to investigate the oil industry, to hold accountable any liable actors, and to end any illegal activities.”
High fuel prices have been a major sticking point in the broader fight against inflation, an economic headwind heading into November for President Joe Biden and other Democrats up for reelection.
Industry analysts have repeatedly rejected broad price gouging claims, particularly during past years of volatility coming out of the pandemic and Russia’s war against Ukraine.
Patrick De Haan, the head of petroleum analysis at the fuel-price monitoring app GasBuddy, called the accusations of an industry-wide price gouging scheme “political theater” that is recycled allegations from lawmakers that have never been found to be true.
“If I had a dime for every time that politicians would try to sue Big Oil, I probably could retire,” De Haan said. “I think this is just more noise. The allegations against Pioneers ex-CEO are certainly worth monitoring. Having said that, I’d be hesitant to draw a conclusion yet because this is a case that has not gone through the legal process.”
The United States has been the globe’s largest crude oil producer since 2018 and pumped out a record 12.9 million barrels of oil per day in 2023, according to the U.S. Energy Information Administration. That number climbed to 13.2 million per day in February.
The national average for a gallon of regular gas was $3.57 on Thursday, according to AAA, down from $3.66 a month ago but is nearly identical to $3.58 from one year ago. WTI Crude, the U.S. benchmark, was around $79 per barrel of oil on Thursday, down from $86 in April but up from the $70 it was one year ago.
The American Petroleum Institute, the industry’s leading lobbying group, pushed back against the Democrats and noted the U.S.’s record output.
“While we don’t know the details of the FTC’s allegations against one individual, the reality is that U.S. producers answered the call to meet growing energy demand, despite a spate of inflationary policies from this administration that threaten our long-term energy security,” an API spokesperson said.
As gas prices soared in 2021, Biden requested the FTC to probe “potentially illegal conduct” by oil companies. In 2022, House and Senate Democrats pushed legislation to force FTC’s hand with a special unit to investigate if the sector was bilking drivers at the pump.
The FTC’s approval of the Exxon-Pioneer merger earlier this year month came with a caveat: former Pioneer founder and CEO Scott Sheffield was barred from joining the new company. The agency found that Sheffield “attempted to collude” with OPEC and OPEC+ “to reduce output of oil and gas, which would result in Americans paying higher prices at the pump, to inflate profits for his company.”
Schumer and his Democratic colleagues wrote that the findings “lend credence to the fear that corporate avarice is keeping prices artificially high.”
Sens. Sherrod Brown (D-OH), Tammy Baldwin (D-WI), Jacky Rosen (NV), and Bob Casey (PA), all of whom are considered vulnerable members, signed the letter.
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The Democrats suggested Big Oil was running afoul of the Sherman Act, an antitrust law.
“Corporate malfeasance must be confronted, or it will proliferate,” the Democrats wrote. “These alleged offenses do not simply enrich corporations; hardworking Americans end up paying the price through higher costs for gas, fuel, and related consumer products.”