A judicial panel has consolidated over a dozen lawsuits accusing U.S. oil companies of conspiring to restrict shale oil production in order to increase fuel prices for consumers.
The case will be presided over by Judge Matthew Garcia in Albuquerque. Garcia, a former chief of staff for New Mexico Governor Michelle Grisham, is known for his affiliation with the Democratic party, according to Reuters.
The lawsuits target several major oil companies, including Hess Corp., Pioneer Natural Resources, Occidental Petroleum, Diamondback Energy, Permian Resources, Chesapeake Energy, Continental Resources, and EOG Resources. These companies argue that the case should be dismissed because the plaintiffs’ complaints do not include antitrust claims.
The initial lawsuits were filed by individual plaintiffs across various states, with the first case originating in Nevada in January. The plaintiffs claim that companies like Pioneer, Occidental, and Continental have coordinated their production decisions, resulting in slower production growth than would be expected in a competitive market.
Earlier this year, Democratic legislators supported these lawsuits following accusations by the Federal Trade Commission (FTC) against Pioneer’s former CEO Scott Sheffield. The FTC alleged that Sheffield had colluded with OPEC to reduce oil supply in 2020.
In response, a group of Democratic senators launched an investigation into major oil companies to gather evidence of collusion with the international oil cartel. The Senate budget committee, which oversees the investigation, has requested the companies to provide any communications with OPEC representatives about oil production, crude oil prices, and the impact of production on pricing, dating from January 1, 2020, to the present. The committee also seeks information on communications with OPEC+ producers.
Scott Sheffield has denied the FTC’s allegations, stating that the decline in oil production in 2020 was a reaction to falling international oil prices rather than collusion.