Washington takes action to help suffering oil and gas sector
Yesterday, we shared with our readers the results of the Louisiana Oil and Gas Association’s (LOGA) independent survey of its membership, which is comprised of 450 companies across Louisiana.
The survey shows that without some kind of emergency relief, energy producers may be forced to shut-in more than half of the wells they currently operate in Louisiana and potentially reduce their workforce by as much as 70 percent over the next 90 days. Some company leaders indicated they are also contemplating bankruptcy. Based on survey projections, more than 23,000 jobs, which generate $2.2 billion dollars in earnings annually, are at immediate risk.
Our Congressional leaders are also taking formal steps in Washington to demand action.
Cassidy Speaks with DOI’s Bernhardt About Offshore Royalty Relief
U.S. Senator Bill Cassidy, M.D. (R-LA) and chairman of the Senate Energy Subcommittee, on Tuesday, spoke with Secretary of the Interior David Bernhardt about how to save oil and gas jobs through royalty relief for producers in the Gulf of Mexico.
“Louisiana oil and gas jobs are at risk because Saudi Arabia and Russia are in a price war and because of a lockdown on our economy. I spoke with Sec. Bernhardt yesterday about preserving jobs and this industry. He promised to quickly process targeted royalty relief on the outer continental shelf using existing law. I will continue to work with Sec. Bernhardt and the administration on this issue,” said Dr. Cassidy.
Graves Joins Colleagues in Calling Upon Saudi Crown Prince to Restore Global Oil Market Stability
U.S. Congressman Garret Graves co-signed a letter on Wednesday to the Crown Prince of Saudi Arabia Mohammad bin Salman urging him to take immediate action to bring stability to global crude oil markets. This letter follows after Graves had called upon the U.S. Department of Energy (DOE) to fill the Strategic Petroleum Reserve (SPR) to absorb the supply glut and to counter the economic warfare threats posed by Saudi Arabia, Russia and OPEC nations. Graves later applauded DOE for their decision to fill the SPR.
The full text of the letter can be found below:
Your Royal Highness:
The United States and the Kingdom of Saudi Arabia have an important strategic partnership that ensures regional stability, counters Iran’s malign activity, and defeats terrorists that threaten our security. The United States also remains committed to maintaining the strong economic ties between our two countries. We are concerned, however, with the Kingdom’s actions to artificially distort global crude oil markets as countries around the world struggle to address a growing economic and health crisis fueled by the COVID-19 novel coronavirus pandemic.
As recently as January, the Kingdom claimed that it would do all it could to ensure stability in the global oil market. But as a result of the Kingdom’s March decision to artificially depress global crude prices, thousands of American workers employed directly by our country’s oil and gas producers, as well as thousands more employed in related industries, face increased financial and economic uncertainty. While other global actors use oil and gas markets as political leverage, the Kingdom must be a model of leadership at a time when a global pandemic drives down demand resulting in significant market volatility. In the United States, the oil and natural gas industry is based on free market principles that resist anticompetitive conduct or government manipulation of markets.
The Kingdom, however, can change course, reduce production, and restore balance to a market that has seen the most drastic price drop in years. Failure to address this energy crisis will jeopardize the joint efforts between our nations to collaborate economically and militarily. The U.S. military presence in the Middle East region has maintained the stability that provides for the economic prosperity and ensures the security of our two nations. As Members of Congress, we have rejected efforts to undermine or undo this partnership. But if the Kingdom fails to act fairly to reverse this manufactured energy crisis, we would encourage any reciprocal responses that the U.S. government deems appropriate.
H.R.H. Mohammad bin Salman bin Abdulaziz Al Saud April 8, 2020 Page 2 Our countries share decades of deep cooperation and leadership combating and defeating existential threats. It is our hope that those characteristics that have defined our strong strategic partnership for years will continue to serve as the bedrock through this current crisis. We hope that as a global energy leader, and Chair of the G20 for 2020, the Kingdom will fulfill its promise and take immediate action to do its part to bring stability – not further volatility – to global crude oil markets.
Previously on March 10, Graves requested the Department of Energy to suspend planned SPR sales and to fill the excess capacity of the SPR. Efforts to include provisions in Phase 3 of the coronavirus response legislation were opposed by some Members of Congress and excluded from the law.
The House Energy Action Team (HEAT) is a coalition of members that supports the development, deployment, and efficient use of common-sense, all-of-the-below/all-of-the-above energy approaches that lower prices for families, strengthen America’s position as the world leader in energy production and makes America more energy independent.