Illustration: Natalie Peeples/Axios
Democrats are discussing a bill to explicitly target oil industry mergers.
Why it matters: Legislation and hearings are intended to pressure the FTC to intercede on consolidation in the oil industry, as it did in the coal sector under President Trump.
Driving the news: Dozens of Democrats, including Senate Majority Leader Chuck Schumer, wrote the FTC Wednesday pressing the agency to do anything possible to investigate and stop a recent spate of attempted mergers in the oil industry.
- Lawmakers cited deals by ExxonMobil, Chevron and Occidental, among many others. They said they believe more dealmaking is on the horizon.
- They argue these activities harm consumers by reducing market choice and giving the major oil companies more power over pricing.
What's next: Ro Khanna, who helped lead House-side work on the letter, told Axios he may draft a bill on the topic and is "going to work with Sen. Schumer on it."
- Sen. Sheldon Whitehouse is also involved in internal conversations on legislation and has said for a while that a bill's been in the works.
- The Rhode Islander told Axios as he waited for the Senate subway that it's "not clear what the details are yet" on the bill. Khanna's office also declined to give specifics.
- But Whitehouse acknowledged what he's discussing internally would explicitly target "big oil mergers" and address "competitiveness issues" once companies "get to a certain market share."
Zoom in: Oil industry consolidation is commonplace when prices are low and usually involves efforts to maximize profits via cost-cutting within the combined company, recent McKinsey research shows.
- Under Trump, the U.S. coal industry went through a similar spate of mergers and acquisitions, and it led to significant FTC intervention.
What they're saying: Republicans say these mergers are simply capitalism at work.
- "Companies see market opportunity, they buy competitors, they buy other companies and move them into different market shares," said outgoing E&C Energy Subcommittee Chair Jeff Duncan. "I don't have any problem with it."
- Sen. Cynthia Lummis said, "That's been so much the nature of the oil and gas industry that when there is a large number of mergers it doesn't concern me."
- At least one Dem climate hawk — Rep. Sean Casten — also wasn't concerned: "I've never been as worried as some of my colleagues are about price gouging by the oil and gas sector."
Between the lines: Energy Secretary Jennifer Granholm took something of a middle ground when our colleague Ben Geman asked her about this Wednesday.
- While she's concerned about potential monopolies, she said a possible benefit of the mergers is that some oil majors "have been taking action on climate and clean energy."
The oil and gas industry is pushing back on these claims before they rise to the level of formal legislation or investigation.
- API sent around a memo to Democratic lawmakers urging them not to sign the FTC letter, arguing it's motivated by environmental groups and election-year politics.
