(Reuters) – U.S. Senate Majority Leader Charles Schumer and 22 other Democratic senators wrote to the U.S. Federal Trade Commission yesterday, saying multi-billion dollar acquisitions by oil and gas giants Exxon Mobil (XOM.N) and Chevron (CVX.N) could lead to higher prices for consumers.
Earlier this month, Exxon proposed buying Pioneer Natural Resources (PXD.N) for $60 billion and Chevron agreed to acquire Hess (HES.N) for $53 billion.
The deals would hurt Exxon’s and Chevron’s midstream competitors, said the signatories of the letter, who included Senators Amy Klobuchar, chair of the Judiciary Committee’s antitrust panel, and Elizabeth Warren, an antitrust hawk.
“These new market dynamics could result in price hikes for midstream customers, and such added costs are often passed downstream to retail customers, including drivers at gas stations,” the senators wrote.
The recent oil deals show the biggest U.S. oil and gas companies have kept investing in fossil fuels as European rivals turn their attention to renewable fuels.
Chevron and Exxon have accumulated huge profits from strong energy prices and demand since Russia’s invasion of Ukraine.
“By allowing Exxon and Chevron to further integrate their extensive operations into important oil and gas fields, these deals are likely to harm competition, risking increased consumer prices and reduced output throughout the United States,” Schumer and the senators said in the letter.
In response to a request for comment, Exxon said that it and Pioneer produced about 5% of U.S. oil.
“For all those who seek even greater U.S. energy independence and far lower emissions, this merger represents nothing but upside for our economy,” the company said in a statement.
Chevron did not immediately respond to a request for comment.
The oil industry last went through an era of major consolidation in the late 1990s when Exxon, Shell (SHEL.L), BP (BP.L) and France’s TotalEnergies (TTEF.PA) merged with rivals to create huge integrated companies. The acquisitions followed a collapse in oil prices that weakened many companies.
“If anything, the FTC (Federal Trade Commission) should be investigating the past anti-competitive mergers of Big Oil conglomerates like Exxon Mobil and Chevron to determine whether these energy giants should be broken up once again,” Schumer and the lawmakers wrote.
