In a legal maelstrom hitting the oil and gas industry, heavyweight players including Hess, Pioneer Natural Resources, and Occidental Petroleum find themselves entangled in a class action lawsuit filed in a U.S. federal court. The suit, spearheaded by three residents from Nevada, Hawaii, and Maine, alleges a clandestine conspiracy among these energy giants to intentionally suppress the production of shale oil. This alleged collusion, the plaintiffs claim, has led to an artificial inflation of consumer fuel prices.
Filed on Friday in a federal court in Las Vegas, the lawsuit specifically targets Hess, Occidental Petroleum, Pioneer Natural Resources, and several other industry players. The accusers contend that these companies have engaged in a prolonged scheme to coordinate production decisions, resulting in growth rates well below what a competitive market would naturally allow.
The defendants, which include Permian Resources, Chesapeake Energy, Continental Resources, Diamondback Energy, and EOG Resources, are accused of jointly manipulating production levels, thereby influencing fuel prices at the pump. The plaintiffs argue that this manipulation occurred despite record oil prices in recent years, asserting that the companies exercised production ‘discipline’ to ensure higher costs for American consumers.
Representatives from the accused companies have yet to respond to requests for comment as of Tuesday.
Patrick Coughlin, the attorney representing the plaintiffs, emphasized that the alleged actions of the shale oil producers directly impacted consumers, forcing them to pay more for gasoline. Coughlin stated that, despite facing record oil prices, these companies prioritized revenue increases over reinvesting in new production.
The lawsuit, seeking nationwide class-action status, aims for a court order against what it deems anti-competitive business practices. It represents all purchasers of retail gasoline from U.S. stations since January 2021. Furthermore, the complaint seeks unspecified triple monetary damages for gas purchasers in over two dozen states, including California, Colorado, Michigan, and New York. Lawyers estimate that there are at least millions of members in both classes across the United States.
The case, titled “Daniel Rosenbaum et al v. Permian Resources Corp et al,” is currently in the U.S. District Court, District of Nevada, under docket number 2:24-cv-00103. As of now, there have been no appearances for the defendants in court.
