Rep. Frank Pallone Jr. (D-New Jersey) has launched an investigation into seven oil and gas companies—bp America, Shell, Chevron, Occidental Petroleum, Devon Energy, Hess and Exxon—for allegedly illegally conspiring to artificially inflate gas prices.
The new examination comes in the wake of recent revelations from a Federal Trade Commission (FTC) investigation into Scott Sheffield, the former CEO of Pioneer Natural Resources Co., who allegedly attempted to illegally coordinate crude oil production levels with the Organization of the Petroleum Exporting Countries (OPEC) and Pioneer's competitors to drive up prices at the pump and rake in additional profits.
“At a hearing last Congress, committee Democrats raised concern that oil companies were artificially inflating gas prices to gouge consumers and produce record profits for shareholders,” Pallone wrote to the CEOs of bp America, Shell USA, Chevron, Occidental Petroleum, Devon Energy, Hess and ExxonMobil Corp. “If U.S. oil companies are colluding with each other and foreign cartels to manipulate global oil markets and harm American consumers who then pay more at the pump, Congress and the American people deserve to know.”
Sheffield “flouted” laws and leveraged limited oil production in the past and has attempted to encourage other U.S. oil producers to follow his lead "to drive up energy costs at Americans' expense," Pallone said.
Pallone pointed to publicly available data that suggests U.S. oil producers limited their production growth, despite high prices, over the same period that Sheffield was trying to influence his competitors. Meanwhile, crude oil prices have reached as high as $120 per barrel.
“I am concerned that Mr. Sheffield’s behavior may represent common practices across the industry, as reporting and the FTC complaint have suggested,” Pallone said. “Simply put, I am worried that Mr. Sheffield’s actions, rather than being ‘entirely inconsistent with how we do business,’ as Exxon has claimed, are instead industry-standard practice—directly contradicting what the largest oil companies, including Pioneer and Exxon, testified to the committee last Congress.”
Pallone asked for documents from each of the seven companies, including all communications to OPEC or OPEC+ involving future production plans; a list of meetings between the companies and OPEC or OPEC+; a detailed description of any efforts to influence potential federal or state government efforts to artificially limit crude oil production; and more.
In a statement, ExxonMobil said, "We learned about these allegations from the Federal Trade Commission. They are entirely inconsistent with how we do business. In fact, following its comprehensive investigation and after ExxonMobil submitted more than 1.1 million documents, 1.5 million lines of production and sales data, over 63,000 contracts and additional communications in response the FTC’s request, the Commission raised no concerns with our business practices."
The other oil companies did not respond to CSP's request for comment on this story.
The full letters are available here:
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