The largest U.S. oil and gas trade group participated in a meeting at the White House Wednesday and lobbied against intervention by the federal government to help companies suffering from a collapse in crude prices.
“We are not advocating for any form of policy relief at this time,” said Bethany Aronhalt, a spokeswoman for the American Petroleum Institute, who confirmed the meeting to the Washington Examiner. “Our focus is on ensuring the free market works.”
Aronhalt said several member company representatives also attended the meeting with White House policy staff, but she did not disclose which ones.
The possibility of federal assistance, which would have to go through Congress, is divisive among the oil and gas industry.
Bigger oil producers represented by the American Petroleum Institute have hedged against low prices and can likely withstand low oil prices for a while, as they have during past downturns.
Smaller independent producers, though, don’t have the same access to cheap capital and could be driven out of business or forced to consolidate with larger companies if low prices sustain.
American Exploration & Production Council, a trade group representing the largest independent oil and gas companies, did not participate in the White House meeting.
Mike Sommers, CEO of the American Petroleum Institute, told the Washington Examiner earlier this week that the industry as a whole can withstand an oil price dispute between Saudi Arabia and Russia.
There is “a lot of concern” among oil and gas companies about the prospect of $30 per barrel oil, a level at which Sommers said producers would not be profitable.
But, he said, “We are focused on long-term fundamentals” that show continued strong demand for oil and gas in future decades.
The White House nonetheless is considering the idea of providing low-interest government loans to shale companies, according to the Washington Post.
Dan Eberhart, CEO of the oil services firm Canary and a President Trump donor, told the Washington Examiner that some companies were advocating for other assistance, such as federal oil purchases to put into the Strategic Petroleum Reserve, lowering royalty rates for oil extracted from federal lands, and increasing tax deductions for drilling expenses.
Trump ally Harold Hamm, who founded the Oklahoma City-based oil and gas producer Continental Resources, told Bloomberg TV on Wednesday he intended to file a complaint with the Commerce Department over what he deemed Saudi Arabia’s “illegal” dumping of oil onto the market.
