US Democrats are calling for a criminal investigation into Big Oil price-fixing

Senate Minority Leader Chuck Schumer urged the Justice Department to “use every tool” to prevent and prosecute price fixing – Copyright AFP SIMON MAINA

Senate Majority Leader Chuck Schumer and nearly two dozen Democrats on Thursday called on 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 a major merger, which concluded there was evidence of anti-competitive practices by oil executives to raise fuel costs for Americans.

“These reports are alarming and lend credence to fears that corporate avarice 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 raise the costs of gasoline, diesel, heating oil and jet fuel “in a way that has materially harmed nearly every American household and business. .”

The letter came as Democrats are escalating a showdown with so-called “Big Oil” over high prices and greenhouse gas emissions as the presidential election looms in November.

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

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

Schumer and his colleagues have argued that industry collusion may have contributed to the sharp drop in U.S. oil production, raising gas prices by 94 cents a gallon since the pandemic hit.

“That means Pioneer and its co-conspirators’ collusion would have cost the average American household up to $500 per car in increased annual fuel costs — an unwanted tax that is particularly burdensome for lower-income families,” they they said.

The FTC barred Sheffield from serving on Exxon’s board following the takeover, but the senators said “only the DOJ can fully pursue and remedy alleged anti-competitive behavior in the oil sector.”

Findings of price-fixing can result in fines of up to $1 million and 10 years in prison for individuals and $100 million for companies.

Sheffield’s lawyers wrote in a federal filing earlier this week that the FTC’s case was built on “a false narrative about these statements and an exaggerated interpretation of the applicable statutes.”

“This document lays out in detail why the FTC is wrong to suggest that I have engaged in, promoted, or even suggested any form of anticompetitive conduct,” Sheffield said in a statement.

“It also shows how public and unjustified defamation of me will have a chilling effect on the ability of business leaders in any sector of our economy to respond to shareholder demands and exercise their constitutionally protected right to advocate industries.”

Pioneer said the FTC’s complaint reflected a “fundamental misunderstanding of the US and global oil markets” and that Sheffield was motivated by strengthening the position of local energy producers to enhance US energy security.