Lina Khan Is Between a BlackRock and a Hard Place

By Robert Bork Jr., December 4, 2023

Early in her tenure, Lina Khan took to the pages of the Wall Street Journal to pledge that good intentions would not protect corporate Environmental, Social and Governance (ESG) proponents from antitrust scrutiny. At the same time, the Chair of the Federal Trade Commission has seen any merger or acquisition of size as a red flag for antitrust scrutiny and sometimes lawsuits. 

It will be interesting to see, then, how the Biden Administration and Chair Khan react to the acquisitions by ExxonMobil of Pioneer Natural Resources and Chevron of the Hess Corporation. Both of the acquired companies have large holdings in oil and gas fields in the United States. The consumer and national security benefits of these deals are obvious – they provide immense capital and expertise to further develop domestic hydrocarbon resources. At a time when war in the Middle East threatens to drive up the price of gasoline, shoring up America’s domestic oil industry is a true safety valve. 

In sum, Lina Khan has publicly proclaimed she would not allow her independence to be compromised by the rhetoric and positions of the ESG movement. And the Biden Administration, facing re-election, should be worried about the prospect of higher gas prices in the year ahead. So it would seem like a slam-dunk for Chair Khan and her colleague, Department of Justice antitrust chief Jonathan Kanter, to let these two deals slide. 

And yet …  

Progressive rhetoric continues to demonize American energy. Just before Thanksgiving, 23 Democratic senators, led by Senate Majority Leader Chuck Schumer (D-NY), asked Chair Khan to open an antitrust probe into these two deals. Even with these acquisitions, ExxonMobil and Chevron will produce and refine only a tiny fraction of America’s total production. But facts don’t hinder these senators, including progressive antitrust trendsetters like Sen. Amy Klobuchar (D-MN) and Elizabeth Warren (D-MA). They are now drawing a progressive line in the sand for the administration, declaring that it must stand up to “Big Oil conglomerates” that will somehow hurt consumers. 

When challenged from by progressives, President Biden almost always jumps to the left. He has long blamed “Big Oil” for abusing its market power to deliver higher prices at the pump. Washington progressives seem intent on following the example of California, which works overtime to stymie and throttle American oil and gas, while replacing it with more expensive and less environmentally sound imported oil.  

When President Biden did dare to tiptoe back in the direction of restoring American leadership in oil and gas, he was quickly put in his place. After approving the Willow project in Alaska earlier this year, President Biden – alarmed by the rebellion of climate activists – pivoted to bar drilling on 1.8 million acres in Wyoming, more than 1 million acres on public land in Colorado and placed a large swatch in the Gulf of Mexico off limits to development. This backtrack prompted Republican Sen. Lisa Murkowski of Alaska to fire back: “Now the Biden administration, at a time when America and our allies need Alaska’s resources more than ever, has decided to go their own way by further locking Alaska down …” 

Worse, from the progressive point of view, the deals by ExxonMobil and Chevron go against the ESG grain. Far from welcoming further development, the whole thrust of the ESG movement has been to defund exploration and development. These deals make good business sense, but the Biden Administration will likely treat them as a challenge to its anti-(American)-oil-and-gas stance and its chest-thumping on antitrust. 

So Chair Khan finds herself in a tough spot. Will she allow two huge acquisitions quickly announced and undergoing rapid execution to defy President Biden’s hostility to that industry? Will she shrug off the FTC’s attempt to gate-keep all big deals? Will Lina Khan resist the administration’s ESG impulses? Will she try to protect her president – who is well below even Donald Trump in five key battleground states – by allowing two deals that could combat higher gas prices during an election to go through? 

On the merits there are no good reasons for FTC to intervene in these two energy deals. The pricing for hydrocarbons is, after all, set in world markets by state-owned giants like Saudi Aramco, Russia’s Rosneft and other national champions that dwarf America’s largest oil companies. There are also no good political reasons to stop a move that could put reduce midstream costs and put downward pressure on energy prices.  

If Khan or Kanter move against the American oil companies, it will be a triumph of ideology over economics, national security, and even this administration’s political self-interest. 

Robert H. Bork, Jr., is the president of the Antitrust Education Project. 

Originally published at Real Clear Markets.