When President Trump addressed the nation Wednesday night to announce steps to fight the coronavirus and its impact on the economy he did not offer any specific financial assistance to the oil and gas industry despite calls from independent oil producers to do so.
Instead, the President suspended travel from Europe and called on the Small Business Administration to provide “capital and liquidity” to any firms affected by the coronavirus.
“Effective immediately, the SBA will begin providing economic loans in affected states and territories,” Trump said in his address.
“These low interest rate loans will help small businesses overcome temporary economic disruptions caused by the virus.”
It also comes as independent U.S. oil companies, who’ve suffered from this week’s meltdown in crude prices, have asked the president to propose some sort of financial assistance, whether it be in the form of low-interest loans, federal oil purchases to support prices or trade barriers to protect the U.S. industry,
The idea of an industry bailout has been a tough sell on and off Capitol Hill, according to POLITICO’s Morning Energy Report. When reports emerged that the White House was considering federal assistance for the oil and gas industry, critics took to social media to blast the idea as a “ShaleOut” and mock the executives asking for aid as advocating socialism.
Even top Republicans on Capitol Hill said they didn’t see the need to help the oil industry. “I don’t think they need any bailouts,” said Sen. John Cornyn (R-Texas), whose state has been the biggest contributor to U.S. oil output growth over the past decade. In fact, conversations with more than a dozen Senate Republicans showed that most said it was too soon to make any decisions to help the industry, and that any action would depend on how long the price war between Saudi Arabia and Russia persists.
Democrats and greens also panned the prospect. More than 20 environmental groups, including Friends of the Earth, Sunrise Movement and Greenpeace USA, wrote to congressional leadership to urge against any coronavirus aid package to fossil fuels.
“According to recent reports, support for the domestic shale industry could become part of a potential coronavirus aid package,” the letter says. “This must be stopped at all costs.” And earlier this week, House Natural Resources Chairman Raúl Grijalva decried the idea during a hearing with Interior Department officials.
On Wednesday, ahead of Trump’s remarks, White House officials met with at least one oil trade group. A spokeswoman for the American Petroleum Institute confirmed that API and “several member company representatives” were at the White House Wednesday morning for a meeting with policy staff to discuss the markets, coronavirus and the economy.
“As we’ve been saying since Monday, we are not advocating for any form of policy relief,” spokeswoman Bethany Aronhalt said.
“Our focus is on ensuring the free market works.” On a call with reporters earlier this week, API President Mike Sommers said that the group would not ask for help from the Trump administration. The push for federal action to help the industry is being led by independent oil producers, not the majors like Exxon Mobil or Chevron, which are better able to withstand the price shock.