Michigan’s Attorney General, Dana Nessel, has initiated a federal antitrust lawsuit against several prominent oil companies, including BP, Chevron, Exxon, and Shell. The lawsuit, filed on October 27, 2023, in the US District Court for the Western District of Michigan, alleges a long-standing conspiracy aimed at suppressing competition from renewable energy sources.
The 122-page complaint contends that these companies engaged in practices that violate both the Sherman Act and the Clayton Act. It seeks various forms of relief, including permanent injunctive measures, disgorgement of profits, treble damages, and a jury trial on all claims.
In her statement, Nessel expressed the urgency of the situation, stating, “Michigan is facing an energy affordability crisis as our home energy costs skyrocket and consumers are left without affordable options for transportation.” She emphasized that rising energy prices stem not from natural economic factors but from corporate greed that prioritizes profit over consumer welfare.
The lawsuit outlines specific allegations against the oil companies, accusing them of coordinated efforts to stifle the development of electric vehicles (EVs) and renewable energy technologies. For instance, it claims that Exxon shelved market-ready hybrid vehicle prototypes in the late 1970s and that Chevron acquired patents for nickel-metal hydride batteries only to restrict their use. Furthermore, the defendants allegedly collectively refused to install EV charging stations at retail locations and abandoned viable solar projects.
Nessel’s complaint describes this conduct as a per se violation of Section 1 of the Sherman Act, arguing that the actions are so inherently anti-competitive that they are illegal without needing to assess their actual market effects. The lawsuit also contends that the alleged conspiracy violates antitrust law under the rule of reason analysis, as it artificially reduced renewable energy output in Michigan’s transportation and primary energy markets. This lack of competition, according to the complaint, has led to increased prices for fossil fuels and limited consumer choices.
To bolster its claims, the lawsuit cites traditional antitrust factors, such as behavior inconsistent with the companies’ independent economic interests, organized coordination through trade associations, and sharing sensitive competitive information. Additionally, the lawsuit invokes the Michigan Antitrust Reform Act (MARA) to provide a state-level legal basis for the claims.
This legal action comes at a time when the energy landscape is marked by ongoing litigation and competing interests regarding fossil fuels and renewable energy. In March 2023, the US Department of Justice filed lawsuits against several states, including Michigan, alleging that climate change initiatives were “unconstitutional” and “burdensome.” Additionally, in February, 22 states initiated a lawsuit against New York over a law that would require fossil fuel companies to contribute approximately $75 billion to a fund for climate change-related damages.
As the case unfolds, it will be closely watched by stakeholders in both the energy sector and environmental advocacy groups, highlighting the complex dynamics of energy production and its broader implications for consumers and the environment.
