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Pressed to fix oil markets, Trump makes no public promises

“I’m with you 1,000 percent,” president tells oil executives

America’s position as a global oil and gas powerhouse is under threat as cheap oil floods the market, placing gaping chunks of the economy and myriad jobs at risk, Republican members of Congress told President Donald Trump in a White House meeting Friday.

At the meeting, also attended by oil industry executives, the lawmakers laid out a list of challenges and policy fixes, prodding Trump to take a hard line against foreign oil powers, but received no specific promises from the president, according to the transcript.

The oil industry executives fell largely silent except for stating their backgrounds and thanking Trump.

[Oil purchase to fill strategic reserve dropped from stimulus]

Since the early days of his administration, Trump has praised domestic oil and gas companies and touted the U.S. as the No. 1 energy producer globally. Cabinet members, like former Energy Secretary Rick Perry, talked up so-called “freedom gas” (domestic natural gas sold abroad) as a way to reach “energy dominance,” a maxim of the White House.

Crumbling oil prices, now below $30 a barrel, change everything, North Dakota GOP Sen. Kevin Cramer told Trump, fellow Republicans, Cabinet officials and heads of major U.S. oil companies during a freewheeling meeting.

“But since you became president, we went from a renaissance to security, to independence, to dominance,” Cramer said, according to a transcript. “And that dominance and that security are — right now are in some danger,” he said.

“Just a quick example: In North Dakota, since Saudi Arabia and Russia announced their little price war, we’ve had $6 billion of cutbacks taken out of our state, planned for this year,” Cramer said in an apparent reference to oil company investments.

Along with Cramer, Republican Sens. Dan Sullivan of Alaska and Ted Cruz and John Cornyn of Texas attended the meeting, as did House Minority Leader Kevin McCarthy.

The men gathered at a time when Americans are encouraged to stay at home and avoid contact or even close distances with others, including gatherings of more than 10 people, because of health concerns over the coronavirus crisis that has enveloped the world, sent the U.S. economy tumbling and sent millions to the unemployment rolls.

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“There are millions of jobs in Texas and across the country that are represented by the men and women around this table and by energy producers,” Cruz said. “If the energy producers in this country that have made America the No. 1 producer of oil and gas in the world can’t access capital to get out of this crisis, we’re going to see bankruptcies at a level this country hasn’t seen in decades.”

Trump did not say if attendees were tested for the coronavirus before the meeting, hours after a White House spokesman said people in close proximity to Trump and Vice President Mike Pence would be tested.

Energy Secretary Dan Brouilllette, Interior Secretary David Bernhardt and U.S. Trade Representative Robert Lighthizer also were present. So were executives for eight oil and gas companies and Mike Sommers, the head of the American Petroleum Institute, the industry’s chief lobbying force in the Capitol. “Some of you I know, and — but I know all of you by seeing you on the covers of all the business magazines and the magazines,” Trump told the executives. “I’m with you 1,000 percent.”

Falling prices

Oil prices dropped to 30-year lows in March after Russia and Saudi Arabia failed to reach a deal to rein in their oil production. Energy ministers from what is known as OPEC-plus, to include Russia, are expected to discuss a deal to limit production on a conference call Monday, according to the Kremlin.

“It’s important that all major producers take part in our joint efforts, including Russia, Saudi Arabia, the USA and other countries both in and out of OPEC,” said Alexander Novak, Russia’s energy minister, according to a government transcript.

“No one wins in a price war, and the Saudis and the Russians aren’t benefiting from their decisions,” Sommers said in a statement.

On Thursday, Trump said on Twitter that he expected Russia and Saudia Arabia were working on a deal to cut production about 10 million barrels, but no agreement has been announced.

House Republicans from oil- and coal-heavy states pressed the president in a letter Thursday to direct Bernhardt to waive royalty payments for companies operating on federal land and in federal waters. Waiving those fees could wipe billions in revenue from the federal coffers and deplete state budgets during the looming economic downturn. Royalty payments from oil and gas extraction exceeded $7 billion in 2018.

“The request for royalty relief is very alarming,” Randi Spivak, public lands director for the Center for Biological Diversity, an environment group, said by phone. “The federal treasury is kind of bleeding.”

The GOP House members also said EPA should cut methane emission regulations and the Energy Department should look to purchase oil for the Strategic Petroleum Reserve, which can fill about 77 million barrels, according to the latest available figures.

A workaround

A $3 billion provision to purchase crude for the reserve was stripped out of the stimulus package, irking Republicans. The account that DOE has to make SPR purchases has about $10 million, and the department would need money from Congress to make SPR purchases.

Brouillette said DOE started looking to purchase 30 million barrels this week, in an apparent end-around move past Congress. The agency found the money elsewhere, he said: “Notwithstanding the desire of the Congress not to give us new money to pursue this idea, we have found an alternative financing mechanism.”

Companies selling to DOE may actually pay the government to hold oil, Brouillette said.

The global oil supply glut has forced some oil companies producing specialty varieties to pay buyers to take oil off their hands, according to market analysts. Thus “negative” per-barrel prices.

Trump replied: “So we’re going to go negative, like interest rates. Negative.”

Asked if anyone at the meeting was tested for coronavirus, Trump did not answer directly.

“Let’s test these guys. You know, they gave us millions of jobs. Listen, they gave us millions of jobs,” Trump said. “If anybody wants to be tested, we’ll test you. I want to test the head of Exxon.”

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