A Washington, DC-based watchdog group last week called on the Department of Justice (DOJ) to investigate whether large natural gas producers, notably Chesapeake Energy Corp. and ConocoPhillips, are conspiring to limit their production to raise the price of natural gas in violation of the antitrust laws. ConocoPhillips said the allegations are "without foundation."
Citizens for Responsibility and Ethics in Washington (CREW) pointed to the current situation with excess supplies and low prices for natural gas, and then called into question announcements by some producers that they would curtail production to reduce the glut. The organization claimed curtailments had resulted in a recent sharp rise in prices.
CREW's Melanie Sloan accused producers of restraining free trade in violation of Section 1 of the Sherman Act. "Gas companies appear to have entered [into] horizontal agreements to restrict their output of natural gas in order to raise gas prices above their current, historically low prices. Consumers certainly are harmed by these practices."
However, Sloan appeared to have some uncertainty about the level of natural gas prices. After claiming curtailments had resulted in a sharp rise in prices, Sloan said that "currently low natural gas prices are a bright spot in an otherwise fairly bleak economy."
ConocoPhillips dismissed the allegations leveled by CREW. "These allegations are without foundation and in no way consistent with our proven track record of being a responsible producer and stewards of our shareholders' investments in us. ConocoPhillips complies with all laws, including antitrust laws," the company told NGI.
"Due to the current low-price environment of natural gas and other economic factors associated with those wells, ConocoPhillips expects its continued gas shut-ins in North America to be approximately 54 MMcf/d, which represents 0.08% of total U.S. production," ConocoPhillips said.
CREW also opposes exports of natural gas, which it said would contribute to increased prices.
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