White House weighs shale aid options as oil prices collapse
An oil rig drilling into the Bakken shale formation in North Dakota. Photo: Andrew Burton/Getty Images
The White House is weighing options to provide financial assistance to U.S. oil producers getting hammered by the price collapse, but the picture is murky right now.
Why it matters: It's a sign of the rapidly worsening conditions for the sector and the Trump administration's scramble to respond to the effects of the coronavirus and falling prices.
Driving the news: The internal discussions were first reported by the Washington Post, and subsequently confirmed by Axios.
- I've also learned that independent oil-and-gas producers via the American Exploration and Production Council (AXPC) has been in touch with the White House on the topic.
Where it stands: There's a bunch of ideas flying around. The WashPost reported that low-interest federal loans were the most likely option for the potential aid.
- Bloomberg reports that some industry lobbyists are pitching the idea of the government buying up some oil to put into the Strategic Petroleum Reserve.
- That would "enable the government to take at least 78 million barrels off the world market and provide a modest bump in prices," per Bloomberg.
- The same story also says that administration is considering a separate idea of lowering royalties on oil and natural gas produced on federal lands.
The intrigue: The Washington Examiner reports that there's some pushback from conservatives to the idea of financial aid for producers.
- Their piece has comments from officials with the Heritage Foundation and the Institute for Energy Research.
What they're saying: AXPC CEO Anne Bradbury said in a statement Tuesday that the group wants "a solution that ensures American companies can continue to invest in and produce low-cost, reliable energy."
- "We believe in the free market system and will advocate for policies that support a level playing field to address geopolitical manipulation of the market," she said.