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Oil industry executives are headed to the White House today to ask President Trump for a taxpayer bailout as oil markets collapse. The president declared via Twitter that he had brokered a deal between Russia and Saudi Arabia to cut back their production, though neither nation has confirmed their acceptance of the terms.
While the oversupply in the market from two of the world's top producers is having an impact on U.S. oil producers, perhaps the bigger concern is the dramatic reduction of demand as economic activity comes to a halt due to the coronavirus pandemic. Energy analysts predict that prices will continue to decline even after supply cuts as markets are oversupplied through at least the first half of the year.
Despite the supply glut in the market, the Interior Department is continuing to hold lease sales for both onshore and offshore oil and gas development. Public lands advocates warn of the risk of abandoned wells and liability for clean up costs falling to taxpayers if companies go bankrupt due to falling prices.
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The main priorities for the Interior Department right now should be helping get emergency health care resources to tribal nations and doing everything in its power to stop the spread of the virus – period. Secretary Bernhardt should make absolutely clear that now is not the time to field oil industry bailout requests, let alone holding oil and gas lease sales— as he has been doing.”
