Trump Reportedly Considers Using Taxpayer Cash To Prop Up Big Oil As Crude Prices Drop
Shawn Thew-Pool/Getty Images
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.