Apr 3, 2020 - Energy & Environment

The public pulse on the oil industry amid its price woes

Ben Geman, author of Generate
Data: Brunswick Group survey, margin of error ±3 percentage points; Chart: Axios Visuals

A new Brunswick Group survey finds a largely supportive public view of the oil-and-gas sector but also backing for attaching strings — including environmental restrictions — to potential federal aid.

What they found: As the chart above shows, most adults surveyed believe the industry has a mostly or somewhat positive effect on the U.S. economy.

  • Support among Republicans is higher, but the survey conducted in late March showed a majority of Democrats in the "mostly" or "somewhat" positive camp too.
  • Over half the public (53%) supports providing some form of financial assistance, including nearly two-thirds of Republicans and slightly less half of Democrats.

But, but, but: 63% of respondents agree that financial assistance should be tethered to commitments to reduce pollution and invest more in "cleaner forms of energy."

The big picture: The polling comes as the industry, especially independent companies, face intense financial headwinds thanks to the collapse in demand and prices.

  • It largely stems from COVID-19, while the Saudi-Russia price war has compounded the challenges.

Threat level: Whiting Petroleum's Chapter 11 filing this week is just the first of a large wave of bankruptcies in the debt-laden U.S. sector if low prices persist, the consultancy Rystad Energy said Friday.

  • Rystad estimates that 70 producers will have trouble meeting interest payments with WTI prices at $30-per-barrel, and at $20-per-barrel, Chapter 11 filings could reach 140 this year. WTI is currently at roughly $27.43.
Data: Brunswick Group survey, margin of error ±3 percentage points; Chart: Axios Visuals

The same Brunswick Group survey shows varying levels of support for potential forms of aid for the distressed industry.

What they found: Few back the idea of easing environmental regulations. There's more support for federal crude purchases.

  • But the recent Capitol Hill economic stabilization bill omitted $3 billion the White House is seeking to buy 77 million barrels for the Strategic Petroleum Reserve.

What we're watching: Today's White House meeting with oil producers and what potential steps the administration could take. 

  • Reuters writes that the "administration may offer ways to help the industry weather the crisis, including waiving royalty payments drillers must pay for oil produced on federal lands, or imposing an import tariff on foreign crude oil."
  • But, as Axios and others have reported, the industry is not unified on policy goals.

Go deeper: Fueled by coronavirus, global oil demand set to drop record amount

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