The Federal Trade Commission (FTC) is challenging oil and gas mergers and acquisitions (M&A) in unprecedented ways, a dangerous political move that threatens the competitiveness of the U.S. energy industry.

For the second time this year, the FTC has put an oil and gas CEO in its crosshairs, this time barring John Hess, the CEO of Hess Corp., from joining the board of Chevron, the U.S. major oil company that agreed to acquire Hess Corp. for $53 billion last October as a condition for its approval of the deal.

The FTC alleges that John Hess held private talks in the past with officials from OPEC, the Middle East cartel that manages its members’ production policies to support oil prices and keep supply and demand in balance.

The Biden administration’s FTC did the same thing with Scott Sheffield, the CEO of Pioneer Natural Resources, as a condition for approval of Pioneer’s sale to Exxon Mobil earlier this year. 

FTC Chair Lina Khan has suggested that Hess and Sheffield’s informal discussions with OPEC officials — mainly on the sidelines of industry conferences in recent years — risked advancing the cartel’s priority of inflating oil prices to the detriment of U.S. consumers.

The FTC’s Khan and the commission’s other two Democrats believe that rising U.S. oil production over the past decade should have driven down petroleum prices for consumers. Instead, the conversations between the CEOs of two mid-sized American oil companies and OPEC officials undermined free market forces, an insinuation that Hess and Sheffield were in cahoots with the cartel, according to the FTC. 

The FTC’s claims amount to a political witch hunt by the Biden administration, which has taken an antagonistic stance toward the oil and gas industry since it took office in January 2021.

For starters, conversations between executives about market conditions are commonplace across all business sectors, particularly at industry conferences. Suggesting Hess and Sheffield coordinated to benefit OPEC is both ridiculous and dangerous.

All one has to do is look at the rapid growth in domestic oil and gas production that Hess and Pioneer Natural Resources have been at the forefront of over the past decade. Hess produced 336,000 barrels of oil equivalent per day in 2013. In 2023, its output was nearly 400,000 boe/d, an increase of almost 20 percent. Pioneer Natural Resources produced around 160,000 boe/d in 2013, a figure that ballooned to 372,000 boe/d a decade later.

These robust growth rates undermine the FTC’s allegations that Pioneer Natural Resources and Hess Corp. were part of OPEC’s grand plan to restrict global oil supplies to keep prices high. Pioneer and Hess have been two of the most important players in the U.S. shale boom over the last 15 years, with Hess a critical developer of the Bakken Shale play in North Dakota and Pioneer Natural Resources a key developer of the Permian Basin in West Texas and New Mexico.

In fact, Pioneer Natural Resources and Hess were considered such attractive takeover targets by ExxonMobil and Chevron, respectively, because of their strong oil and gas growth prospects. John Hess and Scott Sheffield could have shared valuable insights about their companies’ oil and gas assets and how to maximize their value as board members of Chevron and ExxonMobil.

The bottom line is that in a global oil market of over 100 million barrels a day, producers the size of Hess and Pioneer Natural Resources do not have any influence over prices.

Moreover, these M&A deals are about making the industry more competitive with OPEC, and keeping the cost of production down, putting America in a better place in the event that oil prices drop in the future. Far from what the FTC thinks of America’s oil industry, these deals will actually benefit consumers.

John Hess, in particular, has  repeatedly called on the oil and gas industry to invest more in exploration and production to ensure sufficient supply in the future. He has also publicly called U.S. shale the “major culprit” in lowering oil prices in recent years.

But despite the evidence and the realities of the free market, the FTC has dragged his and Sheffield’s name through the mud by associating them with OPEC and price manipulation. Such treatment could be enough to dissuade other oil CEOs from pulling the trigger on sensible, value-added M&A deals for investors and consumers in the future. That’s terrible news for U.S. consumers and our nation’s energy security. Unfortunately, the oil industry has grown to expect this type of harassment from the government.

Dan Eberhart is the CEO of Canary, one of the largest oilfield service companies in the country.