Federal Trade Commission (FTC) Chair Lina Khan has expanded her agency’s reach to many segments of the economy since she took office.  It appears that she has her eyes set on the oil and gas industry as her next target.

The scrutiny of the industry comes after Chair Khan abandoned the longstanding consumer welfare standard, blocked several mergers and acquisitions, and proposed far-reaching regulations that are beyond her statutory authority and would harm nearly every business in America.  Fortunately, courts have rejected many of her actions.   

Chair Khan has also mismanaged the agency, which led to a significant decline in employee satisfaction from 2022 to 2023.  She also requested a $590 million for the agency’s fiscal year (FY) 2024 budget to carry out her economic assault on America, or $160 million more than the agency received in FY 2023, which was one several reasons that she received Citizens Against Government Waste’s September 2023 Porker of the Month award. 

In October 2023, a pair of mergers in the petroleum industry made headlines when Exxon announced its purchase of Pioneer Natural Resources for $59.5 billion, and Chevron said it will be purchasing Hess Corp. for $60 billion.  On November 1, 2023, 23 Senate Democrats wrote a letter to Chair Khan expressing their concern with the Exxon and Chevron deals, including claims it would lead to higher prices for consumers and decreased oil production in the U.S.  The senators also suggested that the transactions would “augment these corporations’ outsized political power, further enabling them to spend millions on lobbyists to thwart climate legislation, litigation to slash environmental rules, and a coordinated campaign to mislead consumers and discredit climate science – all to protect their billions in profits.”

While the sticker price for these deals may be large, that does not mean that they are bad deals that should be blocked by the FTC.  As 38 Republican senators noted in their March 27, 2024, letter to Chair Khan, the FTC has historically viewed oil and gas production in the context of a global market, and if these deals are approved Exxon and Chevron would only make up six and three percent of that market, respectively.   These deals would also likely lead to increased oil and gas production, making the U.S. more economically and strategically secure and bringing down costs for consumers.  They urged Chair Khan to conduct a “fair and unbiased review of these mergers that is rooted in the facts, economic realities, and precedent.”  They warned against basing a decision on the mergers to push “a political agenda that seeks the end of fossil fuel production.”   

If Chair Khan decides that the FTC should review these mergers, she should do so based on traditional antitrust standards and follow the rule of law.  She should not kowtow to political pressure to guide her decision to approve or block the transactions.