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Illustration: Sarah Grillo/Axios

The American Petroleum Institute wants to avoid political baggage that could come from any special government program helping the beleaguered sector.

What they're saying: "Once you invite the government into these businesses, there are long-term repercussions for that, and I think that has weighed heavily on this industry's mind," said Mike Sommers, API president and CEO.

The big picture: The oil and gas industry could see dozens, maybe hundreds, of bankruptcies in the coming months and years as the sector grapples with pandemic-fueled shutdowns choking oil demand, a recent analysis by consultancy Rystad Energy found.

  • Even before the coronavirus crisis, many companies were doing poorly financially.
  • Sommers indicated these firms should not get government support.
“We want to make sure if you were solvent going into this crisis and credit-worthy going into this crisis, you can survive this crisis. For some firms, that was not the case. I don’t think we’re interested in programs that would send good money after bad.”
— Mike Sommers, API CEO and president

The intrigue: Sommers, who represents the industry's largest trade group with more than 600 members, said broader emergency loan programs Congress has already created to offer a range of troubled companies is sufficient for oil producers too. Most of the sector is opposed to special treatment given the longer term political consequences, Sommers said.

  • He shared a comment he said a CEO of one of API's members, a major independent oil and gas company, told him. "You can't ask for capitalism on the way up and then socialism on the way down," Sommers relayed.
  • Sommers spoke to Axios as the White House prepared to offer details on a brewing aid plan aimed at smaller and medium-sized companies.

Flashback: Sommers recalled his time working on Capitol Hill during the government's response to the 2008-2009 recession, where a range of companies, including banks and auto makers, received federal loans. He referred specifically to Jamie Dimon, CEO of JP Morgan Chase, which took $25 billion in recovery loans at the time.

  • "Washington is littered with people who have taken these kinds of money from the federal government and most of the time they are still paying for that kind of government involvement," Sommers said. "Every time Jamie Dimon has to go to the Hill, he has to answer for that [Troubled Asset Relief Program] money he didn't want to take, that he was asked by the government to take."

But, but, but: Not everyone in the industry agrees with API. API's membership is largest and most diverse but also often dominated by the biggest international producers like Exxon and Shell.

  • Lee Fuller, executive vice president of the Independent Petroleum Association of America, which represents smaller and more U.S.-based producers said his group would support a specific program if that's what it would take.
  • "We have a lot more companies in our membership that have been facing these struggles than perhaps API does," Fuller said. "We're trying to make sure they're getting a fair shot."

Go deeper: Trump's plans to help the oil industry (Washington Examiner)

Go deeper

Ben Geman, author of Generate
Aug 5, 2020 - Energy & Environment

Shale's struggles will persist despite a rise in oil prices

Illustration: Sarah Grillo/Axios

WTI, the benchmark U.S. oil future, traded Wednesday morning at its highest since early March — highlighting how the worst of shale's crisis is seemingly over, though more bankruptcies likely lie ahead.

Why it matters: Its price at the time — $43 — is still too low for many producers to do well, though it varies from company to company.

2 hours ago - World

In photos: Egypt unveils 3,000-year-old "lost golden city"

A view on Saturday of the city, dubbed "The Rise of Aten," dating to the reign of Amenhotep III, uncovered near Luxor. Photo: Khaled Desouki/AFP via Getty Images

A top Egyptian archaeologist on Saturday outlined details of a newly rediscovered "lost golden city" near Luxor that dates back more than 3,000 years.

Why it matters: Zahi Hawass told NBC News the large ancient city, unveiled Thursday, tells archaeologists for the first time "about the life of the people during the Golden Age." Johns Hopkins University Egyptology professor Betsy Brian said in a statement it's "the second most important archeological discovery since the tomb of Tutankhamen."

1 dead as severe storms pummel the South

A tree that fell on a home carport damaged a vehicle during a storm in Central, Louisiana. No injuries were reported, according to Central Fire Department. Photo: Central Fire Department/Twitter

Strong storms lashed the South early Saturday, spawning at least one tornado and unleashing powerful winds and hail. And forecasters warned more severe weather was expected to hit parts of the region in the coming hours.

Details: Thousands of customers lost power in Florida, Mississippi, Arkansas, Texas and Louisiana, according to tracking site poweroutage.us. An F3 tornado that hit St Landry Parish, Louisiana, killed one person and wounded seven others.