Washington — The collapse in oil prices has left many US oil and gas producers teetering on financial ruin, moving federal and state policymakers to take actions aimed at blunting the impact of ongoing and unprecedented supply and demand shocks.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
But some of these efforts, particularly a plan to buy millions of barrels of crude for US government stocks, have failed early or have yet to materialize. And, notably, President Donald Trump has given no indication he is pushing for any substantial aid for an oil
"It will get better than ever as soon as our Country starts up again," Trump tweeted Thursday in a message to the oil and gas industry.
Trump, analysts said, may be content with riding low oil and gasoline prices through his re-election campaign.
"It is not clear that the White House fully appreciates how negative the current economic environment is for oil and gas producers," said analysts at Sandhill Strategy, an energy-focused DC consultancy. "The president continues to trumpet the economic benefits of cheap gasoline, and households can certainly find a lot to like about gasoline below $1/gal."
Here's a look at some the efforts underway to aid the industry:
The US Environmental Protection Agency on Friday relaxed rules for summer gasoline standards to allow sales of winter-grade gasoline at least through May 20 to account for a glut of the fuel amid plunging demand as US drivers stay home.
The agency also said it planned to give small refineries more time to meet the US biofuel mandate but gave no other details.
The North Dakota Industrial Commission voted Tuesday to reinstate a program that allows oil and gas operators to receive a waiver to keep wells in not completed or inactive status in order to prevent production during an oil price collapse.
The waivers will be good for one year, and operators will be able to apply to renew them until West Texas Intermediate crude oil prices exceed $50/b for 90 days.
Some Texas oil producers have requested the Texas Railroad Commission impose statewide production limits for the first time since 1972.
But Commission Chairman Wayne Christian has already said he will not support the idea, claiming it would punish Texas producers while doing little to compel producers in other states and nations to cut production, as well.
Christian also said that the idea is impractical since his agency lacks the staff and technology to impose and enforce such limits.
The US Interior Department is considering lowering royalty rates from 18.75% to as low as 12.5% for new offshore oil and natural gas leases in order to spur interest in production in federal water after a Gulf of Mexico lease sale this month drew limited interest, sources familiar with the plans said.
Lawmakers from US Gulf states have also asked Interior to cut royalty rates on existing federal offshore leases in response to low oil prices, but agency officials have given no indication they are considering doing so.
A plan by the US Department of Energy to buy 30 million barrels of US crude fell apart this week after Congress removed $3 billion for the purchases in its coronavirus relief package.
DOE said it plans to continue to look for ways to fund its planned purchases of 77 million barrels of US crude to fill the SPR.
Nine Republican senators have asked the Department of Commerce to launch an anti-dumping case against Saudi Arabia and Russia for flooding the market with an "unprecedented" amount of crude.
The Domestic Energy Producers' Alliance, which is chaired by Continental Resources Executive Director Harold Hamm, has also petitioned for an anti-dumping investigation and called for tariffs on Saudi imports.
US Department of Commerce officials have declined to comment, and it is unclear if anti-dumping remedies are applicable to current market conditions, according to a recent Congressional Research Service report.
With oil prices cratering, US Treasury and State Department officials are ramping up their efforts to keep petroleum flows out of Venezuela and Iran off the global market, analysts said.
"In a collapsed oil market there's every additional opportunity for sanctions hawks to layer it on," said Elizabeth Rosenberg, director of the energy program at the Center for a New American Security and a former senior sanctions adviser at the Department of the Treasury. "In fact, it's in the interest of US producers who are grasping for a lifeline."
On Thursday, the US extended a waiver allowing Iraq to continue to import Iranian gas and electricity only for 30 days and warned it would be the last extension. The Trump administration is also strongly considering letting a waiver allowing Chevron and four US oil services companies to continue work in Venezuela to expire on April 22.