Washington Works to Solve Historically Low Oil Prices

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Aindriu Colgan | NSWA Vice President, Governmental Affairs

President Trump Meets with Oil Executives

President Trump met Friday with the head of the American Petroleum Institute (API), Continental Resources founder Harold Hamm, and the CEOs of ExxonMobil, Chevron, Occidental Petroleum, Energy Transfer Enterprise, and Hilcorp Energy. While, the President admitted that tariffs or an import fee were discussed, it appears that the meeting produced little, if any, results. He indicated after the meeting that his administration was content to let the companies weather the storm on their own, saying “these are great companies, and they’ll figure it out.” However, on Saturday the President seemed to change his mind when, during his Saturday pandemic briefing, he mentioned imposing tariffs on imports of crude oil in order to protect U.S. workers from the recent crash in oil prices. “If I have to do tariffs on oil coming from outside, or if I have to do something to protect our thousands and tens of thousands of energy workers, and our great companies that produce all these jobs, I’ll do whatever I have to do,” he said.

President Trump Calls Saudi and Russian Leaders

President Trump spoke last week with Russian President Vladimir Putin and the Saudi Crown Prince and urged them to sharply reduce their crude oil exports. In a tweet following those conversations, Trump said that both leaders promised to cut back production by at least 10 million barrels a day, maybe more.  He followed it up with another tweet twenty minutes later saying that it could be as high as 15 million barrels.

As of yet, neither Saudi nor Russian leaders have acknowledged Trump’s claim, although Saudi Arabia did request an emergency OPEC meeting to discuss “a desired balance to the oil market.”

DOE Announces Plans to Lease Space in SPR

The Energy Department on Thursday formally offered to lease space for 30 million barrels of oil in the Strategic Petroleum Reserve. The solicitation offers to store 22.8 million barrels of sweet crude oil at three sites and 7.2 million barrels of sour crude oil at another location. Proposed submissions are due by April 9 and oil would be delivered to the Strategic Petroleum Reserve by the end of June.

Secretary Brouillete also revealed to the White House that DOE had identified a way to add oil to the nation’s Strategic Petroleum Reserve despite having had its request for funding to make oil purchases denied by Congress. After accounting the Department’s decision to lease space for 30 million barrels in the SPR, room for about 47 million additional barrels in the SPR remain for government purchase.

Washington Works to Implement Coronavirus Relief Programs

The Treasury Department and the Small Business Administration launched the Paycheck Protection Program, which will provide upwards of $349 billion in loans to small business for job retention and other expenses. Eligible businesses can access the program here.

Senate Energy and Natural Resources Committee Chair Lisa Murkowski (R-AK) requested that Treasury Secretary Mnuchin ensure that federal loans are made available to domestic oil and gas producers affected by reduced global demand and the coronavirus pandemic. A provision in the Coronavirus Aid, Relief and Economic Security (CARES) Act authorizes the Treasury Department to support businesses not traditionally eligible for federal loans. This is the fifth in a series of letters Murkowski has signed. She joined her colleagues in asking the Saudi Crown Prince to calm the markets; requesting that Secretary of Commerce Wilbur Ross investigate the oil dumping by Russia and Saudi Arabia; urging Secretary of State Mike Pompeo to take a more aggressive stance against the Saudi-Russian price war; and asking Energy Information Administrator Linda Capuano to prioritize petroleum storage data and collection.

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