Trump Reportedly Considers Using Taxpayer Cash To Prop Up Big Oil As Crude Prices Drop

From The Daily Caller

Energy

Trump Reportedly Considers Using Taxpayer Cash To Prop Up Big Oil As Crude Prices Drop

Shawn Thew-Pool/Getty Images

Daily Caller News Foundation logo

Chris White Tech Reporter

March 10, 2020 4:36 PM ET

The Trump administration is reportedly floating the idea of extending a federal loan to shale energy companies that are feeling the pain as oil prices plummet.

Any kind of help will take the form of government loans to shale companies, many of which are feeling the pinch as oil prices fall, The Washington Post reported, citing people with knowledge of the plans. White House officials discussed the idea with energy allies, sources told WaPo on condition of anonymity to discuss private conversations.

President Donald Trump should consider “any action … to protect and preserve American interests at this time from being unfairly disadvantaged by whatever government — and we’re talking governments here, whether it be Russia or Saudi Arabia,” Continental Resources founder Harold Hamm told WaPo.

Continental Resources, a petroleum company, lost more than half of its market value Monday as Saudi Arabia and Russia wrestled over whether to reduce crude production amid fears that coronavirus will hamper air travel and potentially wreck the global economy. Hamm is a Trump supporter, WaPo noted in its report.

Hamm’s major stake in the company lost $2 billion as a result of the Russian assault. (RELATED: ‘This Is Masochism’: Russia Wages An Oil War Against Saudi Arabia, US Amid Coronavirus Concerns)

Prices fell into the $30s Monday as the Saudis push for a cut in output to prop up prices, while Russia went the other way, and decided to infuse the market with hundreds of thousands of barrels of oil. Moscow is worried that the U.S. will use shale oil to take advantage if Saudi Arabia ease off production.

Basement-low oil prices could substantially impact oil companies and the global markets, which are already being hurt by fears related to coronavirus. Brent crude dropped to $35 per barrel; and the price of West Texas Intermediate crude fell to $32 from $41 per barrel, a four-year low.

Continental is in a strong financial position, Hamm said, adding that a government loan could help smaller energy companies.

“For some companies in this sector, that could be helpful,” he said.

White House officials appeared to confirm the thrust of the report.

“It’s one area we will be looking at for targeted assistance,” one senior administration official told WaPo.

Plowing taxpayer case into the fossil fuel industry would be a disaster, according to Robert Hockett, an academic at Cornell University who has advised Sens. Bernie Sanders and Elizabeth Warren. Both Democratic senators have campaigned on ending the fossil fuel industry.

“We are in the midst of a crisis where people are literally having to skip work and may miss paychecks or face medical debt” because of coronavirus,  Hockett told WaPo. “The idea you would look to help out shale companies now is like something out of a satire or a bad movie. It’s absurd.”

Shale became king amid the fracking boom, which effectively collapsed the price of natural gas, giving public utilities a low-cost alternative fuel as regulations imposed during he Obama administration hurt coal companies. Hydraulic fracturing and the accompanying rules have provided a one-two punch to coal producers.

The White House has not responded to the Daily Caller News Foundation’s request for confirmation.

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John in NZ
March 10, 2020 6:32 pm

Sounds like a fake news item.

Greg
Reply to  John in NZ
March 11, 2020 4:23 am

So since when has the free market forces been “unfair” in USA?

Blaming Russia, which wanted to maintain the status quo, is the most insane kind of partisan BS imaginable.

Sheri
Reply to  Greg
March 11, 2020 6:56 am

What “free market”?????? Every crybaby idiot running a business thinks they are entitled to success at the level they think they are entitled to and even Trump buys into that crap (plus, he wants re-elected and seems terrifies of an old guy with dementia running against him…..thus, all the hand-outs. Business sense dies quickly in DC). There are no adults left and we are royally toasted.

Oil and gas WERE ALWAYS LIKE THIS. In the 35+ years I have lived in Wyoming, there have been multiple boom and busts. Only now, the morons running the state are dipping into the reserve funds during what was a boom (till last Monday). Fools, whiners, crybabies.

You cannot have free markets when children are running your lives and country.

ATheoK
Reply to  Sheri
March 11, 2020 9:55 am

Notice that few have commented regarding the “guaranteed price” agreements many alleged “renewable” energy companies require before they build their wind and solar farms.

Price supports for me; none for thee!

Lowell
Reply to  Greg
March 12, 2020 11:41 am

I totally agree with Greg that blaming Russia is just an effort to manipulate us. The article said:
“Hamm’s major stake in the company lost $2 billion as a result of the Russian assault.”

Lets look at what really happened:
Saudi Arabia wanted Russia to cut its oil production in order to prop up prices
Saudi Arabia got ticked because the Russians were not willing to cut production.
Since Saudi Arabia increased its own production, Russia no longer found bound to limit its own oil production.

On the other hand American Politicians were on the payoff from pipeline companies in the Ukraine. Russia was losing a significant percentage of their European gas exports to Europe due to Ukrainian siphoning of natural gas out of the pipeline. So the Russians set out building a pipeline thru the Baltic sea in order to bypass the Ukraine. American politicians tried every maneuver to stop Nord Stream.

niceguy
Reply to  Greg
March 14, 2020 10:58 pm

“Blaming Russia, which wanted to maintain the status quo, is the most insane kind of partisan BS imaginable.”

Not if Russia is feeling pain for doing what it’s doing.

That the criteria: if a country or state “feels” (short time) pain (actually, when it causes pain among its constituants or member states), it’s cheating and can be criticized. Same for big corporations.

Scissor
March 10, 2020 6:34 pm

Don’t do it!

Bill Parsons
Reply to  Scissor
March 10, 2020 10:08 pm

Classic! Thanks for the best laugh I’ve had in a long time.

Who is this person, and how soon can she be put in the pillory with her hands safely away from her face?

Jeremiah Puckett
Reply to  Scissor
March 11, 2020 5:35 am

… as I lick my finger and contaminate the papers and podium…

Vuk
Reply to  Scissor
March 11, 2020 12:05 pm

Japan then Italy are two countries with oldest population, which sadly is most affected by corona virus mortality.
This is graph with a logarithmic axis
comment image
See difference in number of infections
Either Japan is not doing enough tests or it is doing right thing. I hope it is the later rather than the earlier; if so then everyone would benefit from Japan’s practice.

leowaj
March 10, 2020 6:37 pm

I smell 2008 again.

Don’t do it. Let the market correct itself.

Loydo
Reply to  leowaj
March 10, 2020 8:21 pm

Hey come on, what harm is a little corporate socialism going to do? Do you think the US taxpayer should have just left the 2008 mess up to the market to fix?

Its the American way: rugged individualism for poor people and socialism for the rich.

Bryan A
Reply to  Loydo
March 10, 2020 9:06 pm

And the Democrats way is Imposed Socialism through Draconian Tactics for everyone

Greg
Reply to  Bryan A
March 11, 2020 4:25 am

So chose between socialism for the rich paid for by the working class and socialism for the poor and working class paid for by the rich.

Just be honest about the choice.

John Endicott
Reply to  Greg
March 11, 2020 5:07 am

socialism for the poor and working class paid for by the rich

That’s how it’s billed, how it actually works is everyone is equally poor and miserable (except for the leaders – some pigs are more equal than others, after all). Just ask Venezuela.

MarkW
Reply to  Greg
March 11, 2020 7:24 am

Ah yes, it’s evil when other guys get free stuff. It’s justice when people like Greg and Loydo get free stuff.

Notice the false choice given. It’s either socialism for the rich, or socialism for the poor.
The choice of socialism for nobody isn’t on the table.

Bryan A
Reply to  Greg
March 11, 2020 12:22 pm

Exactly!!!

Why Socialism at all????

Bryan A
Reply to  Greg
March 11, 2020 12:25 pm

Greg

March 11, 2020 at 4:25 am

So chose between socialism for the rich paid for by the working class and socialism for the poor and working class paid for by the rich.

Just be honest about the choice.

Why chose between Socialism or Socialism??

I chose SocialismCapitalism for all

AK in VT
Reply to  Greg
March 11, 2020 3:17 pm

Socialism means the heavily-taxed rich leaving the country with their money and leaving the middle-class to foot the bill. Happens all the time. Look at the UK in the late 60’s through mid-70’s (lots of musicians and movie actors left for the US after they were famous and wealthy). How about the businesses leaving this country for lower tax countries?

Can’t remember the name of the guy, but there was a basketball player who about ten years ago left the US to play in Russia because the taxes were lower there: though his salary would be lower, his take home pay would be higher. So, he left.

Had a long term employer (contractor) who sold his business in England and left to the island of Guernsey to avoid the high taxes he would face for selling his multi=million pound business.

KcTaz
Reply to  Bryan A
March 11, 2020 1:18 pm

“No society ever thrived because it had a large and growing class of parasites living off those who produce.”

Thomas Sowell

Sheri
Reply to  Loydo
March 11, 2020 7:01 am

Never seen rugged individualism for the poor–they are absolute parasites on the government and thus on working people with enough ambition to take care of themselves. There’s no such thing as socialism for the rich—99% of the rich are greedy, never share except their own tax-exempt, self-serving charities and they depise anyone who makes money. They believe they should have all the money, only them.

As for 2008, the government caused it so I guess stealing money from actual working people was their way of fixing their mess. Responsibility is only for the workers, not the parasites and handlers thereof. Horrible creatures, those socialists and government people are. Taking, taking, taking. Only the parasites love this.

MarkW
Reply to  Loydo
March 11, 2020 7:22 am

Of course Loydo wants to reverse that, socialism for the poor and death for the rich.

Like most socialists, Loydo isn’t upset about government cash being given to people, she’s just PO’d that she isn’t the one getting the loot.

ATheoK
Reply to  Loydo
March 11, 2020 9:51 am

“Loydo March 10, 2020 at 8:21 pm
Hey come on, what harm is a little corporate socialism going to do?”

Another absurdly false Logical Fallacy ‘red herring’, by lolly.

“Loans” are notsocialism!
Any business in America can seek loans.
There is a government structure in America to support the small businesses with loans.
Loans that get paid back!

Unlike Obama’s handing hundreds of millions of dollars over to solar and wind energy companies that promptly went bankrupt.

ggm
Reply to  leowaj
March 11, 2020 4:16 am

The only aid they should get is for the US to massively increase it’s strategic petroleum reserve, and to buy all of that oil from US producers at a “fair” price (eg $40 a barrel or whatever the minimum breakeven price is)

Tom Abbott
Reply to  ggm
March 11, 2020 6:31 am

I like that idea. Pay the oil companies to fill the pertroleum reserve with cheap oil.

If Republicans are worried about increasing the deficit (what a joke, right?) they can transfer the subsidy money they are paying to the windmill farms, to the oil companies. At least the oil companies will be producing something of value for the money.

Btw, these deficit hawks only show up when a Republican is president. When Obama was president, the Republicans gave him everything he wanted to the point that Obama and the Republican Congress doubled the national debt.

So when you hear some Republicans making noises about fiscal responsibllity take it with a grain of salt. I think they are just playing to their base and are not really serious. They haven’t been in the past. A lot of noise, no action.

Trump is the only one who will cut the debt. Give him the presidency and a Republican Congress and he will cut the debt. Trump likes the “Penny Plan” a lot, or something similar.

All the things Trump is doing now are focused on keeping the US economy going so he is going to stimulate any and all sectors that need stimulation because this is an emergency for the economy. The more busineses you let fall by the wayside, the more economic damage is going to occur. Keeping people afloat for a while is a good move, and this Wuhan virus should not shut the economy down for long whether it is contained or not, so these pay outs won’t last that long.

I decided to start calling this new Coronavirus the Wuhan virus after I heard that some leftists were calling people who used this way to refer to the virus as being racists, and I also heard that China is now putting out the false story that the US is really responsible for the Wuhan virus, so I decided I would start calling it the Wuhan virus. It’s not racist. A standard way of naming a virus is to use the location name where it originated and this one originated in Wuhan. So it’s the Wuhan virus whether the leftists in the U.S. or the Chinese like it or not, as far as I’m concerned.

James Allen
Reply to  ggm
March 11, 2020 6:48 am

Which is also corporate socialism. Fill the strategic reserve at the new, low price. Why should taxpayers pay extra to thwart market forces? Crony capitalism is part of the disease. Companies that are too weak to survive cyclical downturns should go under. Better managed companies will absorb that demand and prices will slowly rise. That’s how it works if we don’t have a bunch of craven politicians meddling in the works.

KcTaz
Reply to  James Allen
March 11, 2020 1:24 pm

James, except these aren’t market forces. It’s Russia trying to drive US shale producers out of business by taking advantage of the utter hysteria about the Wuhan virus which is a temporary dislocation. See the difference?

Paul Jenkinson
Reply to  James Allen
March 12, 2020 5:38 am

Who looks after the workers when their collapsed company can’t pay them anymore?
Don’t those pay packets keep us all safe from being Venezuela?

Darrin
Reply to  ggm
March 11, 2020 3:54 pm

Learn a lesson from farmers, this happened to my family as a youngster so don’t know if it’s still being done but likely is. Had a combination of poor prices and bad yields so farmers were facing losing their farms. Government steps in and buys the grain at what had been fair market value and made disaster loans available. Grain went into storage and farms were saved! Thank you government!

Couple years later market turned around, grain prices were hitting the stratosphere along with record yields. Farmers were looking at a big payday that could be used to pay off those loans, buy badly needed equipment, etc.. Then government notices the high prices and floods the market with what they had stuck in storage tanking prices. Farms went broke. Thank you government!

Exact same thing can happen to the oil companies if they ask Trump to buy up their oil to keep them afloat. I’m not big on bail outs because of past experiences but a government backed loan to help through the lean times? I’m not a big fan but can get behind it in a case by case basis. By that I mean their financials should be looked at first to see if they are on solid ground. I don’t see loaning money to a company that’s going to go belly up anyway.

niceguy
March 10, 2020 6:43 pm

“The idea you would look to help out shale companies now is like something out of a satire or a bad movie. It’s absurd.”

So the guy effectively backs up foreign interference.

Maybe he should be investigated for 3 years by a Special Prosecutor? (or special whatever)

TRM
Reply to  niceguy
March 10, 2020 8:26 pm

“foreign interference”? LOL. A cartel by its very definition controls prices to their advantage. OPEC has been around since when? 1960-1? DeBeers? Where ya been man?

In 2014 the Saudis tried to break the shale oil companies in an epic fail if there ever was one. Now Russia has said “no more cuts to production” because it would just get filled with shale oil and the Saudis throw a hissy fit at not getting their way and cut prices starting round 2 of the “SAUDI ATTEMPT” to destroy the shale oil industry. It will fail as well.

Foreign interference? It’s a cartel that can’t “cart or tel” anymore.

Greg
Reply to  TRM
March 11, 2020 4:32 am

A cartel is not defined by prices, it is a group collaborating in their common interest. That may involve price but it is not the definition.

This is NOT the actions of the OPEC cartel. It is the actions of one member against the interests of the others. ie NOT a cartel action.

-d
March 10, 2020 7:14 pm

As an idea, it rates better to me than “Cash for Clunkers,” the “Economic Stimulus” cash giveaway, or “bailing out” Chrysler by selling non-union interest in it to Fiat. But its pretty obvious that a whole crapload of ideas are fielded during a brainstorming session, and that most of them are rejected when they’re evaluated. Not news, and not important.

EdB
Reply to  -d
March 11, 2020 4:14 am

The one idea not floated is the enforcement of flaring regulations. Texas and (Trump) have had pedal to the metal for years on production, by allowing unfettered flaring.

That excess growth in the industry overwhelmed oil demand growth, causing this price capitulation.

Trump needs to go back to his real estate business, where his reckless behaviors are less damaging. MAGA was supposed to help the little guy was it not?

Reply to  EdB
March 11, 2020 5:21 am

$31/bbl will put a serious dent in flaring. The stock prices of Cabot Oil & Gas and other Marcellus shale players have actually been climbing recently. The market is expecting natural gas prices to improve because when oil production slides, the production of associated gas (the stuff that’s flared) will also decline.

The Federal government has no authority to limit flaring anywhere other than Federal leases. In the Gulf of Mexico, obtaining flaring approval is almost impossible, even for legitimate operational reasons.

Texas allows flaring because at $50-60/bbl, oil has value… While at -$2 to $0.50/mcf natural gas has no value. It’s a waste product at Permian Basin prices. And Texas derives a lot of tax revenu from oil & gas production.

If oil prices remain in the $30’s and gas climbs to $3-4/mcf, flaring will become a rarity.

ATheoK
Reply to  David Middleton
March 11, 2020 9:52 am

Thank you for the comments with common sense, David!

DMacKenzie
Reply to  -d
March 11, 2020 6:57 am

Just fix the price. It worked in the 80’s until oil price recovered. A bit totalitarian but no direct subsidies.

Editor
March 10, 2020 7:19 pm

The people providing this information are not named. No conversation is known to have taken place. No official or even unofficial statement has been made by any party. So it is impossible to know whether there is even a scintilla of truth in it. It feels like it’s part of an election-year partisan agenda. ie, fake news.

Greg
Reply to  Mike Jonas
March 11, 2020 4:28 am

Max Keiser on RT asked about whether this may happen. He was not suggesting it was a good idea , more projecting what happening with the bank bailout.

markl
March 10, 2020 7:31 pm

Let’s start a conspiracy theory…… oil prices tanking are caused by Globalists intent on damaging Trump any way they can and since the fossil fuel boom in America is part of of its’ recent economic progress let’s attack that. We couldn’t do it with divestiture because people aren’t that stupid but hurt their stock portfolios? Yea, that’s the ticket.

Tom in Florida
March 10, 2020 7:33 pm

“Plowing taxpayer case into the fossil fuel industry would be a disaster, according to Robert Hockett, an academic at Cornell University who has advised Sens. Bernie Sanders and Elizabeth Warren. ”

That means it is a good idea.

Luke
Reply to  Tom in Florida
March 10, 2020 9:37 pm

This looks like ‘08 all over again. That was controlled demolition, too. Weird huh how that happened right as early voting started in lots of states?

John Endicott
Reply to  Tom in Florida
March 11, 2020 5:12 am

I’m Just waiting for Paul Krugman to weigh in. If he likes it, you know it’s a bad idea. if he hates it, it’ll be a great thing to do!

MarkW
Reply to  Tom in Florida
March 11, 2020 7:20 am

Probably meant cash, not case.

Edward Hanley
March 10, 2020 7:48 pm

The only attributed quotes in this article are from Harold Hamm, who would probably be pleased to get a bail-out; and from Robert Hockett, who wants to see fossil fuels abolished. An unnamed person claimed to be associated with the administrative branch of government suggested they might consider something or other. “The White House has not responded to the Daily Caller News Foundation’s request for confirmation.”

Why is President Trump’s name used in the headline? He is not even involved in the story! Archive this one as archtypical “fake news.”

WXcycles
Reply to  Edward Hanley
March 10, 2020 10:27 pm

Trump would know not to interfere, he’s a business man, he knows about bad choices and the price to paid and incentive to make better choices.

And such an option could only be a shock absorber, bread and butter, not a solution that can extend for a year, thus producing into a gigantic glut. But that shock is in fact the lesson, i.e. be much more careful, build a solid foundation for what you do because the public’s money belongs to the public. Your losses belong to you.

mikewaite
Reply to  Edward Hanley
March 11, 2020 6:19 am

Edward , a bit off -topic but you might be amused by an article in the Guardian about a hoaxer’s phone call to Prince Harry supposedly from Greta Thunberg:
https://www.theguardian.com/uk-news/2020/mar/11/prince-harry-tricked-into-megxit-revelations-by-fake-greta-thunberg
-“On Trump, Harry told the person he believed to be Thunberg: “The mere fact that Donald Trump is pushing the coal industry is so big in America, he has blood on his hands. Trump will want to meet you to make him look better but he won’t want to have a discussion about climate change with you because you will outsmart him.” “-

Tom Abbott
Reply to  Edward Hanley
March 11, 2020 6:39 am

“The only attributed quotes in this article are from Harold Hamm, who would probably be pleased to get a bail-out”

My reading of the article was Hamm was promoting help for smaller oil companies, not for himself.

John Endicott
Reply to  Tom Abbott
March 11, 2020 7:03 am

There’s the stated reason and then there’s the actual intention – which are not always the same thing. Businesses often promote regulations on their own industries under the guise of “safety” but the intended result is to put up barriers to make it difficult for new competitors to get into the ring. So while he claims he’s doing it on behalf of smaller companies, that doesn’t preclude there being something in it for him as well or that his intended result is to benefit himself/his own company.

Bottom line, never take someone promoting something at face value. Always wonder “what’s in it for them?”.

Joel O'Bryan
March 10, 2020 7:55 pm

Iceland let the banks fail when that country had its debt crisis. They recovered quickly. Much faster than conventional wisdom said they would.
If they had propped up the banks the misery would have gone one for a decade rather than a couple of years.

robR
March 10, 2020 8:16 pm

What the heck is more Socialist than govt. bailouts of business? Who needs crazy Bernie, when we have this BS?

Charles Higley
March 10, 2020 8:23 pm

Let’s start by recognizing that Trump is in the middle of a price war between Russia and Saudi Arabia. That said, he can do things that can ameliorate the effects on the US. Problems with that? Give reasons.

Lowell
Reply to  Charles Higley
March 10, 2020 9:39 pm

My understanding is that Russia didn’t agree to the latest OPEC supply cuts and they let their oil production float to its natural level. If oil prices stay down marginal Russian and American producers will go offline. There are three choices to deal with this:
1) Let market forces work
2) Subsidize unprofitable companies and funnel more US tax dollars to wall street.
3) Have the US join OPEC driving prices up.

Anytime the Western media blames Russia for anything you need to make sure your not being sold snake oil.

Editor
Reply to  Lowell
March 10, 2020 10:22 pm

It looked to me that Russia didn’t join OPEC in cutting production, because they thought they could make OPEC take the whole brunt. They thought wrong. OPEC tried to break US shale companies a while ago, so it wasn’t too difficult to work out what their reaction could be. Maybe that was Putin’s intention all along?? Funny thing is that even though this situation is very bad for US O&G companies, it’s net beneficial for most western economies – yet the stockmarkets tanked on the news. We live in interesting times.

Was it OK for Donald Trump to support farmers when China targetted them in the trade war? Is it any different to support shale companies when targetted by Russia/OPEC?

Vuk
Reply to  Mike Jonas
March 11, 2020 1:04 am

It is going to be a three sideded board chess game, for USA to change their contender just after first move wouldn’t be very wise. The other sides have experienced players determined to be there to see it to the end. Saudi’s MBS just got rid of those who disagreed with SA’s tactics and Putin is not going anywhere just yet
“President Putin could rule Russia until at least 2036 after parliament voted yesterday in favour of a constitutional amendment to ‘reset the clock’ on how long he can remain leader.”

Tom Abbott
Reply to  Vuk
March 11, 2020 7:01 am

“President Putin could rule Russia until at least 2036 after parliament voted yesterday in favour of a constitutional amendment to ‘reset the clock’ on how long he can remain leader.”

Another “Leader for Life” like XI in China. Dictators are all the same.

And no, I won’t suggest the US do the same for Trump, even though I would love to give him just as much time as he wants in the presidency because I think he is doing an outstanding job. But I’ll stick to the U.S. Constitution. We are a nation of laws, not of personalities. Or we should be, anyway.

I would like to see a president be eligible for more than two terms as long as the elections are fair and square. Of course, that will never happen. At least not in the near future. I am against term limits. I think this takes away the freedom of the voter to chose who they want to have represent them. Term limits removes the good along with the bad. The voters should make these decisions, not an arbitrary term limit, imo.

Vuk
Reply to  Vuk
March 11, 2020 9:04 am

Hi Tom
You may have misunderstood
“…for USA to change their contender just after first move wouldn’t be very wise.”
USA presidential election is coming and replacing president Trump with Joe Biden “wouldn’t be very wise.”

Tom Abbott
Reply to  Mike Jonas
March 11, 2020 6:49 am

“Was it OK for Donald Trump to support farmers when China targetted them in the trade war? Is it any different to support shale companies when targetted by Russia/OPEC?”

I think it was a good idea for Trump to give the farmers something like $28 billion over two years ($12 billion the first year and $16 billion the second year) to keep them solvent while China tried to use them to put pressure on Trump. Trump nullified China’s attempts to intimidate the farmers and he used money he got from imposing tariffs on China to pay the farmers.

I think Trump still has billions and billions of dollars in his China Tariff Fund, and it is growing larger every day. 🙂

fish
Reply to  Tom Abbott
March 11, 2020 11:46 am

Those tariffs aren’t “imposed” on China, they are paid by American consumers of Chinese goods. All the money in the “China Tariff Fund ” came from Americans.

John Robertson
March 10, 2020 8:23 pm

Anonymous sources.
And it is not even Friday.
For 3 years Anonymous Sources at this same “Media” has assured the citizens,Friday;’We got him,this time we got him for sure”.
As for Chris White,same,all the credibility you can abandon.
Every day.

Bill Parsons
March 10, 2020 11:04 pm

Hard to understand this action in light of recent reports. Oil companies are barely staying afloat in a sea of oil that they have conjured out of the ground. Not all their fault, but they’ve been dancing to the “Sorcerer’s Apprentice”, and that music has come to an end.

The price of oil has cratered because of excess oil in production (around the world). U.S producers flare natural gas (some 500 trillion cubic feet last year) because it is “worthless”. https://www.eia.gov/dnav/ng/hist/n9040us2a.htm

Someone notes that this is a reporter deserving great skepticism. Still, knowing Trump, I wouldn’t doubt it.

I don’t think government should be in the business of picking outright winners. How should it help these – and indeed all suffering industries?

Tom Abbott
Reply to  Bill Parsons
March 11, 2020 7:04 am

“Hard to understand this action in light of recent reports. Oil companies are barely staying afloat in a sea of oil that they have conjured out of the ground. Not all their fault, but they’ve been dancing to the “Sorcerer’s Apprentice”, and that music has come to an end.”

There have been big cutbacks in the Oklahoma oil sector already in recent months and this took place before Saudi Arabia and Russia got into an oil fight.

Bill Parsons
Reply to  Bill Parsons
March 11, 2020 11:41 am

500 trillion —> 500 billion cf (flared gas).

Tom, I like my gas for heating in winter and for my car for getting around. And I’d rather not see my XOM stock at $45, a price it hasn’t seen since 2004.

And declining stock value sure isn’t going to encourage the oil industry to address environmental issues (~ 30,000 dry and abandoned wells in Colorado). But my question remains: what does “help” look like to this industry that is actually too big and too important to fail, but whose individual companies may be driven out of work?

Tom Abbott
Reply to  Bill Parsons
March 11, 2020 2:59 pm

” But my question remains: what does “help” look like to this industry”

That’s a very good question. I guess we will have to wait until we find out the details of all ths.

Jeff Alberts
March 10, 2020 11:36 pm

“while Russia went the other way, and decided to infuse the market with hundreds of thousands of barrels of oil.”

Hundreds of thousands of barrels. That’s what, 5 minutes worth?

MarkW
Reply to  Jeff Alberts
March 11, 2020 7:31 am

What matters is the size of the surplus, when that grows, prices fall. A small increase can have a huge impact on prices when you are dealing with a product that is fairly inelastic.

sky king
March 11, 2020 12:38 am

WaPo propaganda machine at work. Have they started calling the coronavirus a US defense complex product yet?

Greg
March 11, 2020 4:35 am

“We are in the midst of a crisis where people are literally having to skip work and may miss paychecks or face medical debt” because of coronavirus, Hockett told WaPo.

No, this is not “because” of the corona virus, it is because of a disfunctional health care system where people pay astronomical premiums where even basic sickness like flu is not covered and they risk losing their jobs and homes if they catch a virus.

Blaming a virus is like blaming the rain.

Tom Abbott
Reply to  Greg
March 11, 2020 7:17 am

“No, this is not “because” of the corona virus, it is because of a disfunctional health care system where people pay astronomical premiums where even basic sickness like flu is not covered and they risk losing their jobs and homes if they catch a virus.”

President Trump just met with the Medical Insurance companies yesterday and got them to agree to cover all costs of Wuhan virus testing and any medical complications that may result from the disease. No charge to the patient.

Trump is also saying they are going to help any who might have lost their jobs or their paychecks because ot the Wuhan virus.

If Trump wins election in November and a Republican Congress is elected, then Trump will create the best health program you have ever seen. He’s already done wonders with the current health care system, considering he has zero help from the Democrats, which forces him to get things done as much as possible through Executive Orders. But he is limited in what he can do without cooperation from Congress.

Give Trump an opportunity to create a health care program and I guarantee you it will be the Best Health Care Plan Evah! 🙂

MarkW
Reply to  Greg
March 11, 2020 7:32 am

I see our socialists are out trying to use any excuse to impose full socialism on the health care system again.

David Yaussy
March 11, 2020 5:26 am
Jeremiah Puckett
March 11, 2020 5:38 am

Let’s pretend this is a real story. If anything is “too big to fail” it would be the one industry that drives the entire planet.

Editor
March 11, 2020 5:39 am

If we imported a significant volume of oil from OPEC and Russia (OPEC+), a tariff on imported oil would make sense as an anti-dumping measure. However, more than half of our imported crude comes from Canada and Mexico and only about a quarter of it comes from OPEC+ nations.

I’m not sure if I see how federal loans or loan guarantees would be a solution. The problem is that unless companies have solid hedge positions and strong balance sheets, they will quickly have trouble servicing their debt. A loan would only make sense if we knew that the Russia-Saudi price war would be over quickly.

The federal government should take advantage of low prices by topping off the Strategic Petroleum Reserve. It has the capacity for an additional 100 million bbl. They could also consider expanding it. This would help prop up prices at least a little bit, particularly if they only bought domestically produced oil.

They should temporarily suspend royalties on production from Federal leases and boost tax incentives for domestic production.

Tom in Texas
Reply to  David Middleton
March 11, 2020 9:07 am

The SPR was topped off a long time ago. They cycle oil once a year to verify working procedures. From time to time they move temporary plants to a site for cleaning sour oil. half of a given site has sweet crude and the other half has sour crude. 700+ billion barrels.

Reply to  Tom in Texas
March 11, 2020 9:48 am

According to the EIA, the capacity is 727 million bbl.
https://www.energy.gov/fe/strategic-petroleum-reserve

The current inventory is 635 million bbl.
https://www.spr.doe.gov/dir/dir.html

It looks like there’s room for about 92 million bbl. Although I don’t know how that breaks down sour vs sweet.

Tom in Texas
Reply to  David Middleton
March 11, 2020 12:03 pm

David,
you are most likely correct, from time to time they do release a well to help maintain pricing. All of the sites I did work at are salt domes. It takes about 16-18 months just to leach a well. My observations lead me to believe that in order to expand they will need to buy adjacent land and move fences and security. No small operation to accomplish it.

Bill Parsons
Reply to  Tom in Texas
March 11, 2020 11:55 am

What’s the shelf life of oil in ground storage? What happens to “sour” oil?

BernardP
March 11, 2020 9:09 am

The thing with shale is that it’s relatively easy and not-capital-intensive to expand or contract production volume as prices go up or down. It has happened before. Compare with oil sands which are highly capital intensive and thus have to keep producing at a loss as long as prices are higher that marginal costs.

If President Trump provides direct assistance to oil producers, he will make himself more vulnerable to attacks from the Greens. Even the not-so-greens often agree that oil companies should not receive targeted. government assistance.

ATheoK
March 11, 2020 9:44 am

“White House officials appeared to confirm the thrust of the report.
“It’s one area we will be looking at for targeted assistance,” one senior administration official told WaPo.”

Washpoo!?
The alleged Washington Post has not been a source for news of quality at all recently. Instead it has become a mouthpiece for democrat absurdities and fake news.

“Plowing taxpayer case into the fossil fuel industry would be a disaster, according to Robert Hockett, an academic at Cornell University who has advised Sens. Bernie Sanders and Elizabeth Warren. Both Democratic senators have campaigned on ending the fossil fuel industry.”

“advised Sens.{sic} Bernie Sanders and Elizabeth Warren”!?
Hockett, an academic at Cornell University” advised them regarding “ending the fossil fuel industry”!?
Leftist loon comes to mind.

Robert C. Hockett, Edward Cornell Professor of Law”

Prof. Hockett just skips couples of his classes. No PPT, no syllabus, and no homework. His lecture is more like chatting with someone, which is not favored by me. Very open text problems and you cannot miss it.”

While many students like Hockett as a teacher his difficulty level suggests why; “2.8 out of 5 Level of Difficulty
A law professor whom:

“His principal teaching, research, and writing interests lie in the fields of organizational, financial, and monetary law and economics in both their positive and normative, as well as their national and transnational, dimensions. His guiding concern in these fields is with the legal and institutional prerequisites to a just, prosperous, and sustainable economic order.”

I fail to see any topic that qualifies Hockett to advise the country regarding oil, gas or even economics.
That he claims to push “legal and institutional prerequisites to a just, prosperous, and sustainable economic order” is warning enough.

“The White House has not responded to the Daily Caller News Foundation’s request for confirmation.”

Keep in mind that Fox news and “The Daily Caller” are both owned and operated by Murdoch & Sons. Which is mostly “& Sons” now.
Murdoch and his Sons are globalists with significant globalist investments that are endangered by President Trump’s America First policies.

Ergo; Verify any claim you read or hear before accepting what appear to be fake news talking points.

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