CREW Calls on DOJ to Investigate Natural Gas Producers for Price Manipulation
Washington, D.C. – Today, Citizens for Responsibility and Ethics in Washington (CREW) asked the Antitrust Division of the U.S. Department of Justice (DOJ) to initiate an investigation into whether large natural gas producers, including Chesapeake Energy and ConocoPhillips, are conspiring to limit their production to raise demand for and increase the price of natural gas in violation of antitrust laws.
Over the past few months, natural gas prices have dropped to a ten-year low while inventories have increased dramatically. In response, these companies have curtailed their production to raise demand and increase prices.
CREW Executive Director Melanie Sloan stated, “With the price of oil near all-time highs and natural gas at record lows, gas companies should be using this opportunity to wean consumers off foreign oil and over to domestically produced natural gas. Instead, they are engaging in illegal price-fixing to jack up prices here in the U.S. No wonder energy companies are about as popular as Congress.”
Natural gas companies are cutting production in the United States while exporting their product abroad where prices are higher, and, while complaining about an oversupply of natural gas, they are pushing to expand drilling. The actions of gas producers, such as Chesapeake Energy and ConocoPhillips, suggest they are colluding to restrict the nation’s supply of natural gas in order to raise the price. These practices appear to violate the Sherman Act, which restricts agreements among competitors to fix prices or restrict output.
Sloan continued, “It is ludicrous for natural gas companies to bemoan low gas prices and oversupply while simultaneously constricting output and pushing for approval to dig more wells. It is obvious these companies are colluding to manipulate gas prices to their advantage. It’s time for the Justice Department to step in and crack down on these anticompetitive practices.”