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G OVERNOR G REG ABBOTT G OVERNOR G REG ABBOTT
November 17, 2021
The Honorable Joseph R. Biden, Jr. President of the United States The White House 1600 Pennsylvania Avenue NW Washington DC, 20500-0005 Dear Mr. President: Ahead of your meeting this week with Mexican President Andrés Manuel López Obrador, I write regarding two urgent issues that require attention from the Mexican Government: border security, and energy. I ask that you raise these concerns during your time together. Despite numerous calls to action, your administration refuses to enforce our immigration laws and to secure our southern border. Unfortunately, Mexico has also been unwilling to stem the flow of illegal immigration and thus contributed to the open border situation. As a result of the inaction by your administration and the Mexican government, I launched Operation Lone Star in early March to help secure the border and combat the smuggling of people and drugs in Texas. There are currently thousands of state personnel, including DPS troopers, agents, and Texas Rangers, and National Guard soldiers who are engaged in the mission. In the absence of federal action, Texas will continue to step up. I urge you to engage the Mexican government about ways to prevent the smuggling of individuals, drugs, and the continued flow of illegal immigrants into Texas. Additionally, I urge you to take action to protect American assets from seizure by the Mexican government, potentially in violation of international trade laws. The current situation is untenable for U.S. companies seeking to continue business operations, and is quickly becoming an outright barrier to free trade, energy transactions, and U.S. private investment in the region. It requires immediate attention by your Administration to prevent irreparable harm to Texas businesses and workers.
POST OFFICE BOX 12428 AUSTIN, TEXAS 78711 512-463-2000 (VOICE) DIAL 7-1-1 FOR RELAY SERVICES POST OFFICE BOX 12428 AUSTIN, TEXAS 78711 512-463-2000 (VOICE) DIAL 7-1-1 FOR RELAY SERVICES
Case 4:21-cv-04103 Document 2-3 Filed on 12/16/21 in TXSD Page 2 of 2 The Honorable Joseph R. Biden, Jr. November 17, 2021 Page 2
It has also come to my attention that the Mexican government is using militarized police forces to prevent the operation of U.S. businesses, undermining U.S. credibility as a trading partner while the border crisis continues to ravage Texas. In order to protect energy investments in the region, I implore your administration to begin aggressive engagement with Mexico and immediately initiate a dialogue between our countries. Mexico’s actions to curtail competition for Pemex have steadily escalated. The Wall Street Journal recently reported that the Mexican National Guard was deployed to shut down fuel storage assets owned by Texas-based Monterra Energy. Other American companies face similar operational threats. Despite these companies’ continued efforts to work with Mexican regulators, multiple facilities remain closed and under the supervision of the militarized police force, leaving Texas companies and their employees in an untenable situation. These actions come on the heels of continued regulatory assault on American companies by the Mexican government at a time when energy prices are rising across our nation. Accordingly, I ask that your administration immediately engage in a dialogue with Mexican officials to discuss the immediate withdrawal of the Mexican military from U.S.-owned business interests and convey that no further actions to undermine energy development, production, or transmission activities will continue. Sincerely,
Greg Abbott Governor GA:whd
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THE WHITE HOUSE WASHINGTON
November 17 , 2021
The Honorable Lina Khan Chair Federal Trade Commission Washington , D.C. Dear Chair Khan :
I am writing to call your attention to mounting evidence of anti- consumer behavior by oil and gas companies. The bottom line is this: gasoline prices at the pump remain high , even though oil and gas companies costs are declining. The Federal Trade Commission has authority to consider whether illegal conduct is costing families at the pump. I believe you should do so immediately.
A few months ago, at my request, the Director of the National Economic Council wrote to you the Commission to consider monitoring the U.S. gasoline market and addressing any illegal conduct occurring therein . I appreciate that, since then , you have directed the Commission staff to strengthen oversight of mergers in the oil and gas sector that result in less consumer choice and potentially higher prices .
However, prices at the pump have continued to rise, even as refined fuel costs go down and industry profits go up . Usually , prices at the pump correspond to movements in the price of unfinished gasoline, which is the main ingredient in the gas people buy at the gas station . But in the last month, the price of unfinished gasoline is down more than 5 percent while gas prices at the pump are up 3 percent in that same period. This unexplained large gap between the price of unfinished gasoline and the average price at the pump is well above the pre- pandemic average. Meanwhile, the largest oil and gas companies in America are generating significant profits off higher energy prices. The two largest oil and gas companies in the United States , as measured by market capitalization , are on track to nearly double their net income over 2019— the last full year before the pandemic . They have announced plans to engage in billions of dollars of stock buybacks and dividends this year or next. I do not accept hard -working Americans paying more for gas because of anti -competitive or otherwise potentially illegal conduct. I therefore ask that the Commission further examine what is happening with oil and gas markets, and that you bring all of the Commission's tools to bear if you uncover any wrongdoing .
Sincerely
Case 4:21-cv-04103 Document 2-5 Filed on 12/16/21 in TXSD Page 1 of 2 UNITED STATES OF AMERICA
Federal Trade Commission WASHINGTON, D.C. 20580
Office of the Chair
August 25, 2021
The Honorable Brian Deese Director, National Economic Council 1600 Pennsylvania Avenue NW Washington, D.C. 20500
Dear Director Deese: Thank you for your letter outlining concerns about potential unlawful conduct in the U.S. gasoline market. I agree that the Federal Trade Commission should have no tolerance for illegal business practices that harm families and consumers at the pump. The FTC has long reviewed mergers and acquisitions in the oil and gas industry. I am concerned that the Commission’s approach to merger review in recent years has enabled significant consolidation, particularly when it comes to retail fuel outlets. Under existing law, the FTC has typically sought to resolve anticompetitive deals by requiring merging companies to divest fuel stations in overlapping markets. While we undoubtedly face significant limitations under current law, this policy overall may have enabled increased consolidation at the national level, creating conditions ripe for price coordination and other collusive practices. I will be directing FTC staff to take three specific actions to address the concerns raised in your letter: First, I will ask that we identify additional legal theories to challenge retail fuel station mergers where dominant players are buying up family-run businesses. I will also be asking that we take a close look at the divestiture process to ensure that our approach to merger remedies is not encouraging further consolidation or enabling dominant firms to exercise market power. I am especially interested in ways that large national chains may “restore” higher prices through collusive practices, and I will direct our staff to investigate any signs of this type of conduct.1 Second, I will be taking steps to deter unlawful mergers in the oil and gas industry. Over the last few decades, retail fuel station chains have repeatedly proposed illegal mergers, suggesting that the agency’s approach has not deterred firms from proposing anticompetitive transactions in the first place. In July, the Commission rescinded a 1995 policy that allowed companies to propose facially anticompetitive mergers with impunity.2 Accordingly, we will
1
See e.g., Matthew Lewis, Price Leadership and Coordination in Retail Gasoline Markets with Price Cycles, 30 INT’L J. OF INDUS. ORG. 342 (2012). 2 FTC Press Release, FTC Rescinds 1995 Policy Statement that Limited the Agency’s Ability to Deter Problematic Mergers (July 21, 2021), https://www.ftc.gov/news-events/press-releases/2021/07/ftc-rescinds-1995-policystatement-limited-agencys-ability-deter.
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impose “prior approval” requirements to deter those who propose illegal mergers, including in retail gas markets. Third, I will be asking our staff to investigate abuses in the franchise market. Many retail fuel stations are franchised, but most franchisees have no control over prices at the pump. We will need to determine whether the power imbalance favoring large national chains allows them to force their franchisees to sell gasoline at higher prices, benefitting the chain at the expense of the franchisee’s convenience store operations. I will continue to assess how the FTC can use its tools to police unlawful business practices in oil and gas markets, and I am committed to working with the Administration, independent agencies, and state attorneys general to address this concern.
Sincerely,
Lina M. Khan Chair, Federal Trade Commission
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