The Biden administration is chock-full of progressive activists working to expand the federal government’s control over the economy.
Seizing on the administration’s willingness to inch us closer to central planning, a recent Democratic effort to weaponize the Federal Trade Commission could raise the prices you pay at the pump. Fortunately, Republicans are pushing back.
In November, two dozen Senate Democrats sent a letter to FTC Chair Lina Khan urging her to block the pending ExxonMobil/Pioneer and Chevron/Hess mergers on antitrust grounds. As a whole, the letter is wildly out of step with the past half-century of antitrust precedent, which states that business conduct must demonstrably harm consumers to violate antitrust law.
Instead of focusing on American energy consumers, the Democrat letter focuses on how the proposed mergers would impact the left’s ability to enact their radical climate agenda. The letter implores the FTC to “protect Americans from Big Oil,” inveighs against fossil fuel production, and accuses oil and gas companies of “subverting our democracy.” Democrats also argue that allowing the mergers to proceed would threaten the passage of climate legislation like the Green New Deal or a carbon tax.
Of course, these left-wing buzzwords have nothing to do with American energy consumers because Democrats know that both mergers would lower prices at the pump. If approved, the combined entities would increase oil and gas production to the tune of more than a billion barrels of oil over the total lifetime of the assets. This would lower costs for Americans struggling with high energy prices thanks to Biden’s inflation.
Increased fossil fuel production is the real reason Democrats want the FTC to block these mergers. Pushing the Green New Deal and doling out subsidies to jam electric vehicles down our throats is more important to Democrats than making it cheaper for you to fill up your car.
Instead of weaponizing the merger review process for the left’s political gain, the FTC should focus on protecting American consumers. That is why three dozen Senate Republicans sent a letter to Khan this week urging the FTC to conduct a fair, fact-based review of the Exxon/Pioneer and Chevron/Hess mergers.
The Senate Republican letter – organized by Sens. Ted Cruz (R-Texas), Mitch McConnell (R-Ky.), and Lindsay Graham (R-S.C.) – hits on three key points. First, it dismantles the notion that either merger poses a threat to competition. If Exxon acquires Pioneer, it would account for less than 3 percent of global oil and gas production and less than 6 percent of domestic production. Similar numbers for Chevron/Hess – the combined entity would have less than 2 percent of global production and less than 4 percent of domestic production.
Second, the letter corrects the record on several key facts that Democrats distorted surrounding the mergers, and hammers home on the point that Democrats want the government to block these mergers because they categorically oppose fossil fuel production. Third, the letter points out that blocking the mergers could lead to greater greenhouse gas emissions (something Democrats claim to care about) by increasing American dependence on “dirtier” foreign oil.
Republicans are right to sound the alarm here, as the issue is much larger than these two mergers. The FTC has extraordinary power to regulate the economy, and agency leadership has made it clear that their goal is to use FTC authority to enact a progressive economic agenda. Khan has said that the government does not do enough to “[shape] markets economic outcomes.” FTC Commissioner Rebecca Kelly Slaughter advocates a “diversity, inclusion, and anti-racist” antitrust agenda.
Democrats know that their deeply unpopular climate agenda can never be enacted through legislation, so they are taking a crack at enacting it through executive fiat. For decades, the FTC has evaluated mergers based on what is good for consumers, not what would help politicians enact an agenda. Blocking mergers for political reasons is a massive abuse of government power and would leave Americans struggling with high energy prices worse off.
The contrast is simple. Democrats want to weaponize the administrative state to push a political agenda. Republicans want agencies to follow the rule of law and do the right thing for American taxpayers.
Tom Hebert is the Director of Competition and Regulatory Policy at Americans for Tax Reform and executive director of the Open Competition Center.