Exxon Mobil's high energy prices take their toll on consumers, the White House struggling to blame them
Exxon Mobil Corp, one of the largest oil and gas companies, plans to make an acquisition with Pioneer that would give Exxon ownership of the largest producer of gas in the biggest U.S. oilfield. The White House struggles with condemning the widely unpopular deal.
According to Reuters writers Diane Bartz and David French, the White House may have blamed Exxon Mobil for high energy prices taking their toll on consumers, but would struggle to thwart the top U.S. oil producer's contemplated $60 billion acquisition of Pioneer Natural Resources. Five antitrust lawyers and experts have expressed their doubts about the White House's ability to stop the deal.
President Joe Biden has been critical of Exxon and Pioneer for their incredible profits as gas prices continue to rise. He has also called out Exxon for not increasing production despite its soaring profits. In 2021, the White House wrote to the Federal Trade Commission (FTC) chair, Lina Khan, urging her to scrutinize any deals that exhibited "anti-consumer behavior." As a result, the FTC began closely reviewing deals in the oil and gas sector.
However, antitrust attorney Andre Barlow of Doyle, Barlow and Mazard PLLC, pointed out that deals like the Exxon and Pioneer acquisition, which focus on production and exploration, are easier to defend under antitrust law. It is deals involving refinery or retail that typically face more scrutiny. This diminishes the credibility of the White House's criticism of the Exxon and Pioneer deal. Both the White House and the FTC declined to comment, while Exxon and Pioneer did not respond to requests for comment.
The proposed deal between Exxon and Pioneer would make Exxon the largest producer of gas and oil in the Permian basin, covering West Texas and Eastern New Mexico. Pioneer is already the largest producer in the sector, accounting for 9% of gross production. Exxon currently holds the fifth position, contributing 6% of the production. However, it is worth noting that the FTC showed tolerance for another deal in August, when Chevron, the second-largest U.S. oil producer, completed a $7.6 billion acquisition of PDC Energy. This consolidation accounted for 40% of production in the Denver-Julesburg basin, which was a much larger concentration than what the Exxon and Pioneer deal would bring in the Permian basin.
As the White House struggles to condemn the Exxon and Pioneer deal, consumers continue to feel the impact of high energy prices. The outcome of this acquisition and its potential effects on the market remain uncertain.