Lawmakers Urge Washington to Grant Relief to the Oil and Gas Industry

Lawmakers Urge Washington to Grant Relief to the Oil and Gas Industry

April 29, 2020

According to the Pennsylvania Business Report:

Pennsylvania lawmakers joined a nationwide call this month to allow the state’s oil and gas industry to use federal coronavirus (COVID-19) assistance to help with looming loan payments as well as maintaining their current payrolls.

Led by U.S. Rep. Guy Reschenthaler (R-PA), a dozen members of Congress representing Pennsylvania, West Virginia and Ohio sent an April 16 letter to the Trump Administration asking for a tweak to the Main Street Lending Program to allow energy companies to tap into the program to assist with the debt servicing that drives the bountiful production in the Marcellus Shale region. That debt has become a steeper hill to climb this spring as the COVID-19 lockdown combined with a stretch of bearish fundamentals to keep a lid on prices.

The Main Street Lending Program was quickly passed by Congress and signed by President Trump with the goal of saving as many jobs as possible. The program’s requirements prohibit the recipients from using the money to pay down or refinance outstanding loans; however, allowing companies to make their loan payments would enable them to continue operations instead of closing and taking their employees’ jobs down with it.

A dozen senators from oil and gas producing states also wrote a letter to the administration asking them to make key changes to the credit requirements for obtaining federal loans to the oil and gas sector.

The loans currently are based on an individual company’s credit rating as of March 22, which the lawmakers pointed out was about the time the entire industry was being sullied by plummeting prices and evaporating demand. The senators proposed changing the date to early March, when balance sheets and credit ratings were in better condition than they were when they limped into April.

The senators wrote, “Assisting these companies could be the difference between maintaining our domestic energy production and workforce, or shedding more U.S. jobs and returning to dependence on foreign sources of oil.”

We couldn’t agree more. The administration and Congress should listen to the leadership from oil and gas producing states who are speaking on behalf of their constituents that are carrying the burden of the struggling industry. It’s time for us to defend the very industry continuing to keep the country running during this time of uncertainty.