Twenty-three Senate Democrats have written to Attorney General Merrick Garland to request that the DOJ investigate the oil industry for violating the Sherman Antitrust Act.
Oil Industry Accused Of Price Fixing
Majority Leader Schumer and 22 other Senate Democrats wrote to AG Garland:
We write regarding our serious concerns about alleged collusion and price fixing in the oil industry. While investigating ExxonMobil’s (Exxon) proposed $60 billion acquisition of Pioneer Natural Resources (Pioneer) – the largest oil-and-gas deal of the 21st century – the Federal Trade Commission (FTC) uncovered evidence that founder and former Pioneer CEO Scott Sheffield colluded with the Organization of Petroleum Exporting Companies (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.”
These reports are alarming and lend credence to the fear that corporate avarice is keeping prices artificially high. This is also a national-security concern: this alleged collusion with OPEC may have served to enrich countries like Iran and Russia that are actively seeking to undermine the United States and our allies.
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. We therefore urge the Department of Justice (DOJ) to investigate the oil industry, to hold accountable any liable actors, and to end any illegal activities.
…
The strategy appears to have worked. From pre-pandemic times to current day, industry collusion may have contributed to the 49% decrease in the U.S. oil production growth rate, the increase of $23.41 in the average crude oil price per barrel, and the $0.94 increase in the average price of retail gasoline. That means Pioneer’s and its co-conspirators’ collusion may 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. Meanwhile, Western oil majors collectively earned more than $300 billion in profits over the last two years, a surge that many market experts believe cannot be explained away by increased production costs from the pandemic or inflation.
…
Corporate malfeasance must be confronted, or it will proliferate. 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. The DOJ must protect consumers, small businesses, and the public from petroleum-market collusion, and an important part of that mission means seeking full restitution and imposing all penalties supported by the facts and the law. If any oil corporations or executives have violated the Sherman Act, we urge you to follow the law and seek appropriate punishment.
Trump Offers To Sell US Energy Policy To The Oil And Gas Industries While Democrats Call For Criminal Investigation
Over the last several weeks, it has been reported that Donald Trump has offered to sell the oil industry control of US energy policy in exchange for $1 billion in campaign contributions. An investigation has also been opened in the US Senate into Trump’s attempt to make a deal with Big Oil that would give them illegal access to and control over US policy to the point where the industry has pre-written executive orders for Trump to sign if he returns to the White House.
Historically, the oil industry has consistently tried to manipulate the market to control prices and maximize profits for consumers. Usually, the threat of an investigation has been enough to get the industry to back off of the market manipulation.
Senate Democrats have uncovered what appears to be evidence of criminal activity, so they have gone several steps beyond the usual and requested a criminal probe into the industry.
The oil industry is not alone in using the pandemic as an excuse to keep prices artificially high. Studies have found that the main cause of inflation isn’t government policies, but corporate profiteering.
Inflation will decrease once corporate America starts being held accountable for its potentially illegal actions. A DOJ investigation of the oil industry would put every other big corporation on notice that price gouging must end.
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