Overnight Energy: Trump reportedly opposes royalty cuts for oil, gas companies | House GOP presses Saudis to ease oil production | Exxon Mobil cuts budget amid industry slump

Overnight Energy: Trump reportedly opposes royalty cuts for oil, gas companies | House GOP presses Saudis to ease oil production | Exxon Mobil cuts budget amid industry slump
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ALL ABOUT OIL:

Treated like royalty... President TrumpDonald John TrumpFormer employees critique EPA under Trump in new report Fired State Department watchdog says Pompeo aide attempted to 'bully' him over investigations Virginia senator calls for Barr to resign over order to clear protests MORE opposes giving widespread royalty cuts to companies that drill for oil and gas on public lands and waters, Bloomberg reported Wednesday. 

Two people told the news outlet that he expressed opposition to such a policy during a Tuesday meeting. 

The report follows recent letters by mostly Republican lawmakers urging him to lessen royalties paid by companies using these lands and waters as the industry faces sinking demand and international production standoffs. 

The White House declined to comment on Bloomberg’s report. 

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Interior Department spokesperson Nicholas Goodwin told The Hill in an email that the department already “has established processes by which companies can apply for discretionary royalty relief.”

“Such requests may be granted in cases where an operator is prevented from operating or producing on a lease for reasons beyond or outside their control,” he said. 

Growing pressure: Last week, a group of more than 40 House Republicans wrote to President Trump asking him to provide royalty relief, among other measures, for the industry which has been hit by sinking demand and international production standoffs. 

Prior to that, a group of 13 Republicans and one Democrat sent a letter to Interior Secretary David Bernhardt asking him to reduce or waive royalties for oil and gas leases in the Gulf of Mexico.

A party split: Most Democrats are not on board with those calls. This week, a group of 16 House Democrats wrote to Bernhardt to remind him of “tight legal restrictions that exist on unilateral action” for reducing royalties.

We've got more on the story here

 

And speaking of royalties... A number of House Republicans are warning Saudi Arabia to ease oil production as a trade war between the kingdom and Russia has flooded markets and depressed oil prices.

Lawmakers, led by House Republican Whip Steve ScaliseStephen (Steve) Joseph ScaliseClyburn: Cowed GOP ascribes 'mystical powers' to Trump Top GOP lawmakers invite Blue Dogs to meet with China Task Force Top GOP lawmakers invite Blue Dogs to meet with China Task Force over coronavirus probe MORE (R-La.), said they were concerned “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."

The letter to Crown Prince Mohammed bin Salman comes as the Organization of the Petroleum Exporting Countries (OPEC) prepares to meet Thursday to discuss production levels.

Oil prices in March hit the lowest level in 18 years, with prices now hovering in the mid $20 range after remaining around $55 in February. 

While coronavirus has limited people’s ability to travel, the global market has been overwhelmed with supply – harming U.S oil producers who must rely on the more expensive fracking process to produce oil.

“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,” lawmakers said. 

President Trump has floated that both Russia and Saudi Arabia may be willing to reduce production by 15 million barrels.

But those comments have been followed by threats to possibly impose tariffs on foreign fuel sources – a concerning idea to many in the oil industry – or imposing production cuts on U.S. producers.

House Republicans alluded to the potential for consequences amid slumped oil prices.

“Failure to address this energy crisis will jeopardize the joint efforts between our nations to collaborate economically and militarily,” they wrote. “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.”

The Saudi Arabian embassy in Washington did not immediately respond to request for comment. 

Read the full story here

 

Cutting back… Exxon Mobil is slashing its budget in response to falling oil prices and is one of the latest companies to limit production as demand falls due to the coronavirus outbreak.

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The oil giant announced Tuesday that it would cut its capital budget by 30 percent, some $10 billion, while cutting its operating expenses by 15 percent.

Oil companies rely on such budgets to drill new wells, an expensive activity key to keeping oil supply steady as existing wells dry up.

The news comes as the U.S. Energy Information Administration (EIA) forecast oil production would drop in April, potentially continuing through the rest of the year.

Exxon said the move “put us in the strongest position when market conditions improve.”

Read more on that here

 

WELL THIS IS UPSETTING: Warmer weather is unlikely to significantly impede the spread of the novel coronavirus, a National Academies of Sciences (NAS) panel told the White House on Tuesday.

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About a dozen members of the Academies’ Standing Committee on Emerging Infectious Diseases and 21st Century Health Threats published the report, addressed to Kelvin Droegemeier, head of the White House’s Office of Science and Technology Policy.

Their report found that while studies of how temperature and humidity affect the virus’s transmissibility are not yet clear, previous research suggesting a connection were flawed.

“There is some evidence to suggest that [the coronavirus] may transmit less efficiently in environments with higher ambient temperature and humidity; however, given the lack of host immunity globally, this reduction in transmission efficiency may not lead to a significant reduction in disease spread” without efforts such as social distancing, the report states.

No such seasonal aspect has been observed in other coronaviruses such as SARS and MERS, the report noted.

The report found various issues with data quality in existing research including the "estimates of reproductive rate, assumptions about infectivity period, and short observational time windows.” It also found they failed to account for factors like geography, per capita income, access to testing and the quality of local health care systems.

Both President Trump and Anthony FauciAnthony FauciOvernight Health Care: Hydroxychloroquine ineffective in preventing COVID-19, study finds | WHO to resume hydroxychloroquine clinical research | WHO says no evidence coronavirus is mutating The Hill's Coronavirus Report: Rep. Val Demings calls for a new DOJ Office of Police Standards; Trump, GOP to pull convention from NC Trump says he will move Republican convention out of North Carolina MORE, director of the National Institute of Allergy and Infectious Diseases, have suggested warmer temperatures may slow the spread of the virus, although Fauci has noted that without effective mitigation, another outbreak could occur in the fall.

Read more on that here

 

ON TAP TOMORROW:

OPEC leaders will meet to discuss production amid falling oil prices.

 

OUTSIDE THE BELTWAY:

Air pollution could make coronavirus more severe for some Louisianans, Nola.com reports

Local leaders shut down popular recreation sites, campgrounds in Grand Staircase, San Rafael Swell, other hiking hot spots, The Salt Lake Tribune reports

Multiple cities suspend plastic bag bans due to coronavirus concerns, we report

 

ICYMI: News from Wednesday...

Pope says coronavirus outbreak may be one of 'nature's responses' to climate change

Exxon Mobil cuts budget, production amid industry slump

Top science panel: Coronavirus unlikely to significantly subside with warmer weather

House Republicans threaten pushback on Saudi Arabia amid oil market slump

Multiple cities suspend plastic bag bans due to coronavirus concerns

Trump opposes widespread royalty cuts for oil and gas companies: report

 

FROM THE HILL’S OPINION PAGES:

America must take steps now to sustain its energy dominance, writes Bernard L. Weinstein, associate director of the Maguire Energy Institute.