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

Oil giants meet at White House amid talk of buying strategic reserves
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Oil giants gathered at the White House Friday, meeting with President TrumpDonald John TrumpTwitter CEO: 'Not true' that removing Trump campaign video was illegal, as president has claimed Biden formally clinches Democratic presidential nomination Barr says he didn't give 'tactical' command to clear Lafayette protesters 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.

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“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 Institute 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.

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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 CruzFormer Trump adviser Jason Miller to join reelection campaign Texas Republicans call on county GOP chair to resign for saying Floyd's death was staged Rosenstein takes fire from Republicans in heated testimony 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 Energy: US Park Police say 'tear gas' statements were 'mistake' | Trump to reopen area off New England coast for fishing | Vulnerable Republicans embrace green issues Vulnerable Republicans embrace green issues in battle to save seats Senate Dems introduce bill to keep pilots and bus and train operators safe MORE (D-Mass.), Jeff MerkleyJeffrey (Jeff) Alan MerkleySenate Dems press DOJ over coronavirus safety precautions in juvenile detention centers Democratic unity starts to crack in coronavirus liability reform fight Oregon GOP Senate nominee contradicts own campaign by saying she stands with QAnon MORE (D-Ore.) and Bernie SandersBernie SandersBiden formally clinches Democratic presidential nomination OVERNIGHT ENERGY: Trump signs order removing environmental reviews for major projects | New Trump air rule will limit future pollution regulations, critics say | DNC climate group calls for larger federal investment on climate than Biden plan Google: Chinese and Iranian hackers targeting Biden, Trump campaigns 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 MurkowskiThe Hill's Campaign Report: Trump juggles three crises ahead of November election Retired Navy admiral behind bin Laden raid: Forcefully clearing DC protesters was not 'morally right' The Hill's 12:30 Report: Trump takes victory lap in morning news conference MORE (R-Alaska) penned a letter to Treasury Secretary Steven MnuchinSteven Terner Mnuchin The Hill's Coronavirus Report: Association of American Railroads Ian Jefferies says no place for hate, racism or bigotry in rail industry or society; Trump declares victory in response to promising jobs report Trump signs bill giving businesses more time to spend coronavirus loans The Hill's Coronavirus Report: BIO's Michelle McMurry-Heath says 400 projects started in 16 weeks in biotech firms to fight virus, pandemic unemployment total tops 43 million 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 Institute 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.