Trump Explores Options to Support U.S. Oil and Gas Industry

April 27, 2020

Last week, the oil and gas industry experienced a historic drop in oil prices as prices plummeted to the negatives on Monday. Following the drastic drop in the market, President Trump called on the Treasury and Energy secretaries to find funding to support oil companies during this troubling time.

On top of the oversupply facing the industry domestically, a wave of about 20 Saudi Arabian supertankers carrying more than 40 million barrels of crude oil is set to arrive in May. The decision to send the Saudi tankers to the U.S. was made a month ago but is facing growing opposition and pressure from Republicans to stop the foreign oil from unloading and adding to the surplus supply.

According to The Washington Post:

Treasury Secretary Steven Mnuchin said on Sunday that the Trump administration is considering government loans to help out the industry, raising the possibility of taking an extreme step to try to limit more economic damage.

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In conversations with independent analysts, senior administration officials have floated a variety of ideas including the imposition of tariffs on imported crude oil; purchasing oil in the ground and leaving it there until prices rebound; providing cash in return for equity stakes in faltering companies; and creating a government lending program similar to one for the airline industry.

The Federal Reserve could provide backing to some oil companies, just as it is doing with other businesses short on credit.

Oil-state lawmakers wrote to Treasury Secretary Steven Mnuchin, Energy Secretary Dan Brouillette, and Federal Reserve Chairman Jerome Powell earlier this week, asking them to assist the struggling industry during this time. The Senators wrote that the U.S. faces the “unacceptable” prospect of “once again becoming reliant on oil imports.” A fear we share, and the rest of the country should as well.

However, Democrats have strongly opposed any aide to the oil and gas industry, desperately trying to appeal to their eco-extremist supporters. The left is ignoring the dramatic impacts a lack of government aid to the industry would have on American energy jobs and our country’s future national security and economy.