Oil giants meet at White House amid talk of buying strategic reserves

Oil giants gathered at the White House Friday, meeting with President TrumpDonald John TrumpCampaigns face attack ad dilemma amid coronavirus crisis Outgoing inspector general says Trump fired him for carrying out his 'legal obligations' Trump hits Illinois governor after criticism: 'I hear him complaining all the time' MORE in the hopes of securing aid as crude prices have plummeted amid the coronavirus outbreak and a price war between Russia and Saudi Arabia.

Oil prices have skydived under the twin threats, dropping to prices in the mid-20s for a barrel of oil, down from more than $50 a barrel in February.

As stresses on the industry magnify, there have been growing calls from Republicans to assist oil producers.

“We’ll get our energy back,” Trump said at the meeting. “I’m with you 1,000 percent. It’s a great business, it’s a very vital business and honestly, you’ve been very fair. You’ve kept energy prices reasonable for a long period of time.”

The meeting appeared to renew administration efforts to fill the nation’s oil reserves after the initial $3 billion request was left out of the coronavirus package.

“At these prices you’d think we’d want to fill up every cavity,” Trump told the lawmakers and oil executives present at the meeting, a reference to the 77 million gallons of space in the nation’s Strategic Petroleum Reserve.

Among those in attendance at the meeting were representatives from Exxon, Phillips 66, Chevron, and oil tycoon Harold Hamm as well as Energy Transfer Partners, the company behind the Dakota Access Pipeline.

The meeting marks a shift for the oil industry, with the American Petroleum Industry previously stressing that it would not seek direct assistance.

But the administration has continued to float other forms of assistance, with Trump announcing Thursday his hopes that Saudi Arabia and Russia may begin to scale back their production, a move that could dent the oversupply of oil on the market as the pandemic leads to dwindling demand.

Meanwhile the Department of Energy has looked for other ways to fill the petroleum reserve, offering to rent space to oil producers that are running out of storage space for their goods — a service the government would be paid for in oil. 

Energy Secretary Dan Brouillette said Friday they would buy oil through an “alternative financing mechanism” but provided no additional details.

Lawmakers at the meeting echoed interest in filling the petroleum reserve, with Sen. Ted CruzRafael (Ted) Edward CruzOvernight Energy: Oil giants meet with Trump at White House | Interior extends tenure of controversial land management chief | Oil prices tick up on hopes of Russia-Saudi deal Oil giants meet at White House amid talk of buying strategic reserves Florida sheriff asks for new leads in disappearance of Carole Baskin's former husband after Netflix's 'Tiger King' drops MORE (R-Texas) calling it “inexcusable” that Democrats opposed the measure's inclusion in the coronavirus stimulus package.

“Now I think Congress needs to go back and address it,” he said.

Trump likewise encouraged new legislation on the effort, saying, “I don’t think anyone can reject it.” 

Democrats have consistently resisted efforts to boost the oil industry, including through oil purchases. 

“Using federal assistance — including low-interest loans, royalty relief, tax breaks, or strategic petroleum reserve purchases — in order to prop up oil companies would be a wasteful misuse of government resources that would exacerbate the climate crisis,” Sens. Ed MarkeyEdward (Ed) John MarkeyOvernight Health Care: CDC recommends face coverings in public | Resistance to social distancing sparks new worries | Controversy over change of national stockpile definition | McConnell signals fourth coronavirus bill Democratic senators want probe into change of national stockpile description Overnight Energy: Oil giants meet with Trump at White House | Interior extends tenure of controversial land management chief | Oil prices tick up on hopes of Russia-Saudi deal MORE (D-Mass.), Jeff MerkleyJeffrey (Jeff) Alan MerkleyOvernight Energy: Oil giants meet with Trump at White House | Interior extends tenure of controversial land management chief | Oil prices tick up on hopes of Russia-Saudi deal Oil giants meet at White House amid talk of buying strategic reserves Democrats ask EPA, Interior to pause rulemaking amid coronavirus MORE (D-Ore.) and Bernie SandersBernie SandersCampaigns face attack ad dilemma amid coronavirus crisis Cuomo's been good, but he's not going to be the Democratic nominee Does Joe Biden really want to be president? MORE (I-Vt.) wrote a letter to Trump last month.

But it’s clear Republicans want direct assistance for the energy sector that has been so resisted by Democrats and environmental groups. 

Sen. Lisa MurkowskiLisa Ann MurkowskiOil giants meet at White House amid talk of buying strategic reserves GOP senators begin informal talks on new coronavirus stimulus Murkowski pushes Mnuchin for oil company loans MORE (R-Alaska) penned a letter to Treasury Secretary Steven MnuchinSteven Terner MnuchinTens of thousands of travelers from China arrived in US as administration debated restrictions: report Pelosi, McConnell clash over next coronavirus bill Trump eyes additional funds for small businesses impacted by pandemic MORE asking for loans for oil companies.

Cruz used Friday’s meeting for the same push, warning that without access to capital, companies would likely go under.

“There are jobs hanging in the balance,” he said. “We’re going to see bankruptcies at a level this country hasn't seen in decades.”

The meeting yielded few details on Trump’s announcement Thursday that he hopes to broker an agreement between Saudi Arabia and Russia to reduce production by as much as 15 million barrels.

“They were having a competition,” Trump said at a press conference after the meeting. “We’ll see how it all works out. I think it’s gonna work out very well. It’s gonna take a long time to get rid of that. There's [a] massive excess amount of oil, and gas, massive, like probably there’s never been.” 

He went on to say the free market would help sort it out, remarks likely to calm the nerves of an oil industry opposed to production quotas or tariffs.

“No one wins in a price war, and the Saudis and the Russians aren’t benefiting from their decisions,” the American Petroleum Industry said in a release after the meeting.

“We also urged the administration to avoid U.S. policies that could do more harm than good for American producers.”

Rachel Frazin contributed.

Updated: 6:30 p.m.