Nearly 50 Democratic lawmakers in the US Congress have urged the Federal Trade Commission (FTC) to launch a comprehensive investigation into recent mergers and acquisitions by major energy corporations.
The call for action comes on the heels of a significant uptick in consolidation within the sector, with oil and gas companies embarking on a $250 billion buying spree in 2023 alone. Leading players such as Exxon Mobil, Chevron Corp, and Occidental Petroleum executed acquisitions totaling $135 billion during the year, leveraging high stock prices to secure access to lower-cost reserves, reported Reuters.
The trend has persisted into the current year, highlighted by notable deals such as Chesapeake Energy’s agreement in January to acquire Southwestern Energy in a $7.4 billion transaction, positioning itself as the largest independent natural gas producer in the United States.
Expressing concerns over the potential ramifications of unchecked consolidation, Senate Majority Leader Chuck Schumer and Representative Ro Khanna, among other Democratic lawmakers, underscored the importance of preserving competition within the industry.
Related: President Biden Renominated Rebecca Kelly Slaughter To FTC
“If a small group of dominant firms is allowed to control this industry, American consumers and industry competition will only suffer,” the lawmakers emphasized in a joint letter to the FTC. “Therefore, we urge the FTC to extend its current investigations, open inquiries into these new deals, and take all appropriate actions to protect competition in this industry.”
Their concerns echo sentiments raised by U.S. Energy Secretary Jennifer Granholm, who recently addressed the issue of monopolies in the energy sector. Granholm, speaking at an event hosted by Axios, voiced apprehensions about monopolistic tendencies within the industry, particularly in light of President Joe Biden’s commitment to lowering prices, including those of gasoline.
Granholm acknowledged the potential benefits of mergers in accelerating efforts by some major oil and gas companies to transition towards cleaner energy sources. However, she also underscored the importance of ensuring that such consolidation does not stifle competition or hinder progress towards addressing climate change.
“Many of the majors, many of them not all … have been taking action on climate and clean energy,” Granholm remarked. “I’m encouraged that there seems to be a movement in this direction.”
The push for FTC intervention reflects growing concerns among policymakers regarding the potential negative implications of consolidation within the oil and gas industry.
Source: Reuters
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