DoingItLocal

WASHINGTON—U.S. Senators Chris Murphy (D-Conn.) and Richard Blumenthal (D-Conn.) joined 22 Senate Democrats in a letter to Attorney General Merrick Garland and Assistant Attorney General for Antitrust Jonathan Kanter calling on the U.S. Department of Justice (DOJ) to use every tool at its disposal to prevent and prosecute collusion and price fixing in the oil industry. The senators called for the DOJ to launch an industry-wide investigation into possible violations of the Sherman Act to hold any bad actors accountable and to redress any harms to competition and consumers. The letter also outlined how Big Oil’s alleged collusion with the Organization of the Petroleum Exporting Countries (OPEC) is a national security concern that aids countries looking to undermine the U.S.

The letter follows a Federal Trade Commission (FTC) investigation into the Exxon-Pioneer merger – called for Congressional Democrats – that uncovered evidence of price fixing involving American oil executives and OPEC officials that have resulted in higher energy costs for American families and businesses.

“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 senators wrote. “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.”

The senators concluded: “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.”

The letter was also signed by U.S. Senators Chuck Schumer (D-N.Y.), Tammy Baldwin (D-Wis.), Cory Booker (D-N.J.), Sherrod Brown (D-Ohio), Maria Cantwell (D-Wash.), Bob Casey (D-Pa.), Catherine Cortez Masto (D-Nev.), Tammy Duckworth (D-Ill.), Dick Durbin (D-Ill.), John Fetterman (D-Pa.), Kirsten Gillibrand (D-N.Y.), Mazie Hirono (D-Hawaii), Amy Klobuchar (D-Minn.), Ed Markey (D-Mass.), Jacky Rosen (D-Nev.), Bernie Sanders (I-Vt.), Jean Shaheen (D-N.H.), Brian Schatz (D-Hawaii), Tina Smith (D-Minn.), Elizabeth Warren (D-Mass.), and Sheldon Whitehouse (D-R.I.).

The full letter can be read HERE and below.

Dear Attorney General Garland and Assistant Attorney General Kanter:

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.

According to the FTC’s complaint, Mr. Sheffield worked to orchestrate “anticompetitive coordinated output reductions” between and among U.S. crude oil producers and OPEC, ultimately to “pad Pioneer’s [and OPEC’s] bottom line[s]…at the expense of U.S. households and businesses.” Mr. Sheffield, it seems, was determined to pull off this collusion even if it meant ignoring opportunities to drill more oil and sell it at lucrative high prices, which would create more chances for rivals to undercut the industry equilibrium and compete on price. For example, on April 16, 2024, Mr. Sheffield said at a conference: “Even if oil gets to $200/bl, the independent producers are going to be disciplined.” It also appeared that Mr. Sheffield was certain that he and his allies could enforce that discipline. He warned competitors that they should be “disciplined” about capacity growth and “stay[] in line,” even threatening that “[a]ll the shareholders that I’ve talked to said that if anybody goes back to growth, they will punish those companies.” In private WhatsApp communications with senior OPEC officials, Mr. Sheffield assured his company’s competitors that “Pioneer and its Permian Basin rivals were working hard to keep oil output artificially low.” These private assurances from Mr. Sheffield stretched back to beginning of the COVID pandemic as Pioneer and other American producers sought to “limit Permian oil production in the face of falling oil prices globally.

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. By banning Mr. Sheffield from serving on Exxon’s board following its acquisition of Pioneer, the FTC has taken an important proactive step to prevent further collusive activity. However, only the DOJ can prosecute and fully redress the alleged anticompetitive behavior in the oil sector. Section 1 of the Sherman Act proscribes price fixing and stipulates a fine of up to $100,000,000 for corporations and a fine of up to $1,000,000 and 10 years in prison for individuals.

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. We appreciate your attention to this serious matter.

WASHINGTON—U.S. Senator Chris Murphy (D-Conn.), a member of the U.S. Senate Health, Education, Labor, and Pensions Committee, along with U.S. Senator Richard Blumenthal (D-Conn.) and U.S. Representative Jahana Hayes (D-Conn.) joined U.S. Senator Jeff Merkley (D-Ore.), U.S. Representative Katherin Clark (D-Mass.), and 22 other members of Congress to reintroduce the Elementary and Secondary School Counseling Act, legislation that would greatly boost the availability of mental health providers in America’s public schools. Mental illness affects 20% of American youth. This bicameral legislation will put additional mental health providers in elementary and secondary schools across America.

“Kids spend most of their time in the classroom, so teachers and counselors are often the first people to notice when something is wrong. This funding will help ensure school districts have the personnel and resources they need to identify students going through a tough time or facing a mental health crisis and connect them to the care they urgently need,” said Murphy.

“There is no ignoring the mental health crisis affecting our youth. We know young people are taking their own lives at an accelerating rate, and the decrease in available mental health professionals is only exacerbating this crisis. I have been a long-time proponent for increasing access to school-based mental health providers to support children across the nation.  I am proud to support the Elementary and Secondary School Counseling Act—legislation that tackles this crisis head on,” said Blumenthal.

“Supporting children in school also means providing resources to support their social and emotional needs. Schools are in desperate need of more mental health providers to ensure we are immediately addressing students in need,” said Hayes. “The Elementary and Secondary School Counseling Act will help fill vacant school-based mental health provider roles so all students can have access to resources that promote their mental wellbeing and educational success.”

The recommended maximum student-to-counselor ratio is 250 students per counselor, but currently, the national average is 385 students per counselor and continues to rise. For school psychologists, the recommended maximum ratio is 500 students per provider, and 250 to 1 for school social workers. The Elementary and Secondary School Counseling Act would establish five-year renewable grant programs to help elementary and secondary schools to hire additional school-based mental health providers such as counselors, psychologists, and social workers, ensuring students can receive the mental health care and support they need to achieve their full potential. 

Students are 21 times more likely to visit school-based health centers for mental health than community mental health centers, but school districts across America too often lack the resources to provide students with the in-school treatment and care they need and deserve. Furthermore, schools that employ more school-based health providers see improved attendance rates, academic achievement and career preparation, and graduation rates, and lower rates of suspension, expulsion, and other disciplinary incidents. 

U.S. Senators Michael Bennet (D-Colo.), Cory Booker (D-N.J.), Sherrod Brown (D-Ohio), Laphonza Butler (D-Calif.), Bob Casey (D-Pa.), Chris Coons (D-Del.), Dick Durbin (D-Ill.), John Fetterman (D-Pa.), Martin Heinrich (D-N.M.), Mazie Hirono (D-Hawaii), Tim Kaine (D-Va.), Angus King (I-Maine), Amy Klobuchar (D-Minn.), Alex Padilla (D-Calif.), Jack Reed (D-R.I.), Jeanne Shaheen (D-N.H.), Tina Smith (D-Minn.), Chris Van Hollen (D-Md.), and Ron Wyden (D-Ore.), along with U.S. Representatives Ted Lieu (D-Calif.), Lauren Underwood (D-Ill.), and Linda T. Sánchez (D-Calif.) co-sponsored the legislation.

The bill is also endorsed by the American Federation of Teachers, American Foundation for Suicide Prevention, American Mental Health Counselors Association, American Psychological Association, American School Counselor Association, Anxiety & Depression Association of America, Girls Inc., International Society of Psychiatric-Mental Health Nurses, National Association of Elementary School Principals, National Association of School Psychologists, National Association of Secondary School Principals, National Council for Mental Wellbeing, National Federation of Families, Postpartum Support International, School Social Work Association of America, and Western Youth Services.