WH Convenes Oil CEOs at Summit 04/04 10:45
President Donald Trump offered assurances of better times and coronavirus
tests to oil CEOs at a White House summit Friday, but no firm proposals for
easing the industry's way as the coronavirus pandemic and plunging petroleum
prices threaten America's yearslong fracking boom.
WASHINGTON (AP) -- President Donald Trump offered assurances of better times
and coronavirus tests to oil CEOs at a White House summit Friday, but no firm
proposals for easing the industry's way as the coronavirus pandemic and
plunging petroleum prices threaten America's yearslong fracking boom.
Executives of Chevron, Exxon and other large and medium-size petroleum
companies and industry trade groups, as well as Republican lawmakers, met with
Trump in hopes of hammering out a U.S. response. Ramped-up oil and gas
production from Saudi Arabia and Russia and the economic slump from the
coronavirus outbreak have created a global oil glut, dropping oil prices well
below $30 a barrel.
"We'll work this out," Trump promised the oil executives. He added later, of
Saudi Arabia's and Russia's heavy pumping, "Ultimately, the market is going to
get them to stop."
No new action was immediately announced at Friday's gathering. The gathering
appeared to be the first meeting where new guidelines were in place in which
all attendees of meetings with the president are tested for the virus.
The president, however, did not seem to be aware the new policy had been put
into place until after the meeting was over.
"You know what? I like it. Let's test these guys," he said in response to a
question about the policy. "Listen: They gave us millions of jobs. If anybody
wants to be tested, we'll test them."
Trump had talked Thursday night of working with Saudi Arabia and Russia to
persuade them to ease up on oil pumping, which is helping pull down oil prices
and threatens more expensive U.S. shale oil production. The two countries "are
fighting over this, and as everybody knows, it's, you know, really killing an
industry," Trump said then.
But at least one oil industry expert is urging the White House and oil
company executives to focus instead on dealing with looming domestic problems
from the oil market crisis, rather than fixate on the industry's bottom lines.
Amy Myers Jaffe, director of the energy security program at the Council for
Foreign Relations, pointed to the possibility of U.S. disruptions in diesel
fuel for trucking -- trucks that Americans homebound by the pandemic
increasingly depend upon --- amid the market chaos.
"This really requires ... a national coordinated response," Jaffe said,
referring to bottlenecks in U.S. fuel supplies arising from the current
petroleum glut. "You have to think about national security."
Oil companies are pitching wildly varying actions for the administration.
Some GOP lawmakers and small and medium-size oil companies are asking for
measures including an oil embargo on Saudi Arabia or tariffs and other punitive
measures to persuade the Gulf kingdom to stop flooding the global market with
In attendance Friday was Harold Hamm, executive chairman of the shale oil
company Continental Resources, who has asked the Commerce Department to
investigate what he contends is illegal dumping of below-cost crude oil onto
the market by Saudi Arabia and Russia. Hamm and Continental together donated
more than $1.5 million to Trump's campaign and political action committee.
Other big industry players who attended have been donors. Kelcy Warren,
chairman and CEO of Energy Transfer Partners, and his wife have given over $2.1
million to Trump, his inaugural committee and his election efforts. Exxon Mobil
gave $500,000 to Trump's 2017 inaugural committee, while Chevron donated
Small and medium oil producers --- who are some of Trump's and the GOP's
loyalist campaign supporters --- want Trump to press global mediation to
encourage major oil producers to ease back on pumping.
One oil industry regulator in Texas, Ryan Sitton, has been floating the idea
of production caps and reaching out to leaders from OPEC and Russia, suggesting
that offering to cut production in some way might be a negotiation chip the
U.S. could bring to the table.
Oil giants, meanwhile --- with cash reserves that smaller producers don't
have --- have been more willing to let the markets run as they will, knowing
they are in better position to ride it out.
The American Petroleum Institute, which represents oil and gas producers as
well as refineries, said in a letter to Trump that the group does not want the
administration to take any steps that would restrict oil supply.
Oil companies and Republican oil-state lawmakers rallying to their support
deny it's a matter of oil billionaires seeking bailouts. Hydraulic fracturing
unleashed the U.S. shale oil and gas boom over the past two decades, pushing
the United States to the top spot among global petroleum producers. Russia and
others fault U.S. frackers in the current supply glut.
A dozen Republican senators also are asking the Trump administration to
reduce or suspend royalty payments on public land leases to ease costs for the
Energy Secretary Dan Brouilette, who attended Friday's meeting, agreed this
week to fill up the country's Strategic Petroleum Reserve, the underground
reservoir of stockpiled U.S. government oil, potentially easing the supply glut
and price fall for the industry.
The Trump administration has encouraged the U.S. oil and gas industry to
dominate the world's energy market. The past two weeks alone, the
administration has pledged to ease up on environmental and public health
enforcement for the oil industry and others during the pandemic, and published
a final rule rolling back Obama-era mileage standards, locking in increased gas
and diesel consumption by drivers for years.
The summit has oil companies "sitting before the man asking the man to make
a decision. And underneath you have this beehive of conversation and activity
and who knows how it will turn up," said Bill Miller, a longtime Texas
lobbyist, political analyst and veteran of past U.S. booms and busts.