LAWMAKERS – TRUMP HELP BIG OIL
President Donald Trump is expected to meet with executives from major oil and gas companies at the White House as oil prices plummet to their weakest in almost two decades.
With the industry facing losses due to low demand amid the coronavirus outbreak and competitive prices from Russia and Saudi Arabia, Trump is hosting officials from ExxonMobil, Chevron Corp. and Continental Resources, among others.
Over 40 GOP lawmakers wrote to Trump Friday urging him to give U.S. oil producers a boost. The lawmakers wrote in favor of Russia-Saudi negotiations and reduced royalties for drilling on federal land. Republican campaigns, including Trump’s, have long received significant funding from the oil and gas industry.
Not only have U.S. oil prices plunged by two-thirds since early January, March was crude’s worst month since oil futures started trading in 1983. The current $20 a barrel price, which is significantly low, could lead oil companies failing to pay debt and eventually set off bankruptcies.
The Trump administration has several options, including pushing Saudi Arabia and Russia to reduce production, waive royalty payments for drillers producing on federal land or put an import tariff on foreign crude oil, Reuters reported.
However, disagreement between independent shale drillers and big oil companies might prove to be a hurdle as the administration deliberates its next steps. While shale companies are demanding the federal government impose sanctions against Saudi Arabia and Russia, oil companies oppose market intervention. Both have strong ties to the White House.
“Imposing supply constraints, such as quotas, tariffs, or bans on foreign crude oil would exacerbate this already difficult situation,” the letter said.
Enjoying close ties to the administration, the trade group asked for relief from environmental regulation instead, which was granted by the Environmental Protection Agency earlier this week. The agency announced it would not penalize companies that ignore environmental standards
Meanwhile, shale producers are reportedly lobbying for sanctions against Saudi Arabia and Russia. The industry has asked Rick Perry, former energy secretary under Trump, to lobby on their behalf.
The meeting comes a day after Trump tweeted he struck a deal with Crown Prince Mohammad Bin Salman, who had spoken to Russian President Vladimir Putin, and expected a cut back of 10 million barrels. The countries haven’t confirmed plans to cut production, Reuters reported. Trump’s proposal is a reversal from his earlier stance in which he had praised gas prices coming down.
The shale industry has been forced to cut down its drilling plans and faces severe losses. On Wednesday, shale specialist Whiting Petroleum became the first big producer to file for bankruptcy. The industry is proposing preventing Saudi crude oil from reaching a refinery in Port Arthur, Texas, Financial Times reported.
LAWMAKERS – TRUMP HELP BIG OIL
Oil and gas industry an ally of Trump, GOP
Traditionally supporting Republican candidates, the oil and gas industry has put more than $1.3 million into Trump’s 2020 reelection bid. The oil industry has given over $50 million to federal candidates and groups this cycle, ninth among all industries. Nearly 90 percent of that money went to Republicans.
Sen. John Cornyn (R-Texas) is the top recipient from the industry this cycle, raising almost $569,000 from affiliates at big companies such as Energy Transfer Partners and Chevron Corp. Texas is the leader in oil and gas production, and Cornyn has repeatedly looked out for the interests of industry. Cornyn’s support has helped him receive nearly $4.1 million in contributions from the industry over his political career.
House Minority Leader Kevin McCarthy (R-Calif.) received the second most from oil industry donors, totaling almost $410,000.
Koch Industries is among the top contributors, spending over $8.4 million of which nearly $1.2 million went directly to candidates. Nearly $7.3 million went to outside groups, including $5 million to Americans for Prosperity, a conservative super PAC backed by Charles Koch, $500,000 to the Congressional Leadership Fund and $750,000 to the Senate Leadership Fund.
Americans for Prosperity has spent over $605,000 supporting Cornyn’s reelection. The group spent over $486,000 and $55,000 backing top Democratic targets Sen. Thom Tillis (R-N.C.) and Sen. Cory Gardner (R-Colo.) respectively. It also spent nearly $103,000 backing Rep. Henry Cuellar (D-Texas), a conservative and controversial Democratic figure.
Companies in the industry tend to give more in campaign contributions to members who typically vote against environmental protection, a recent study by Proceedings of the National Academy of Science stated.
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