Interior chief's former client among firms that secured COVID-19 relief

Interior chief's former client among firms that secured COVID-19 relief
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A former industry client of Interior Secretary David Bernhardt was able to secure significant relief from a government agency at a time when oil prices hit historic lows during the coronavirus pandemic.

Since April 1, the federal government has allowed Samson Resources to hit pause on at least 51 drilling leases belonging, at least in part, to the oil and gas company. Drilling operators can request suspended leases when oil and gas prices are low, allowing them to resume operations when the market is more favorable.

The Samson lease suspensions were granted by the Bureau of Land Management (BLM), which is overseen by the Interior Department. The BLM says it has evaluated requests for lease suspensions on a case-by-case basis since the start of the pandemic.

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The agency granted other lease suspensions during that period, but the ones approved for Samson accounted for about one-eighth of the total amount. The suspended leases were first identified by the progressive Western Values Project and verified by The Hill.

“For most things that we’ve tracked in the Trump administration, things don’t happen by chance,” said Western Values Project Director Jayson O’Neill.

“We’ve seen time and time again in this administration and particularly in the Interior Department, run by a former lobbyist, that that former lobbyist’s clients tend to get favorable treatment,” he added.

An Interior Department spokesperson said all companies applying for lease suspensions are treated equally, with no special considerations.

“Entities with leases sometimes request suspensions. Any company is free to submit an application and all companies are subject to the same standards, reviewed by State-level BLM career employees. Nothing else is relevant to that determination,” Interior spokesperson Conner Swanson said in an email.

At the start of the pandemic, decreased demand for oil combined with international disputes led to a historic plunge in prices, which dropped at one point to negative $40 per barrel, meaning people were being paid to take possession of the commodity.

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Since then, prices have somewhat rebounded, registering nearly $43 a barrel on Thursday afternoon. Prices hovered around $50 a barrel in February.

When the oil market appeared to be in free fall, congressional Republicans called on the Interior Department to provide relief to producers by reducing the royalties paid by companies that drill on federally owned land.

The Trump administration said in April it would not provide blanket relief, but would instead use “long-standing regulatory tools” like allowing producers to apply for royalty relief or a lease suspension.

The BLM approved the majority of applications, including suspensions for 422 leases and royalty rate cuts on 471 leases from April through July.

Operators applied for suspensions on 517 leases and cuts on 618 leases.

Samson has benefited from other coronavirus-related assistance that is not tied to the Interior Department. The company was one of many that obtained a Paycheck Protection Program loan of between $1 million and $2 million, according to data from the Small Business Administration.

A Samson spokesperson did not respond to a request for comment from The Hill.

Bernhardt worked as a lobbyist for many years and has been known to carry a card listing companies that could cause conflicts of interest so that he can recuse himself from agency dealings with those firms.

He lobbied for Samson in 2012 and 2013 on matters relating to Interior and Congress.

Other former clients include Eni Petroleum, Sempra Energy, Halliburton Energy Services, Targa Energy, Noble Energy and the Westlands Water District.

Some industry players have pushed for sector-specific assistance, while others have dismissed the need for any financial assistance.

American Petroleum Institute (API) President Mike Sommers said earlier this year that the industry does not want a government “bailout.”

Industry groups like API, however, have sought other forms of relief from environmental compliance requirements they deem “non-essential” during the pandemic.

Changes to a Federal Reserve in April eased borrowing requirements for a lending program set up after the coronavirus hit allowed borrowing for heavily indebted companies and let them use the loans to refinance, paving the way for oil and gas companies to secure government financing.

"This is where we see the priorities of the Trump administration, it's fueling ... extractive resource industries that have given them a lot of campaign donations," said O'Neill of the Western Values Project.