Sanders, Democrats decry possibility of assistance to oil companies amid coronavirus outbreak

Sens. Ed Markey (D-Mass.), Jeff Merkley (D-Ore.) and Bernie Sanders (I-Vt.) wrote a letter to President Trump on Thursday saying that the administration should not provide financial assistance to oil companies which have been hit by declining oil prices due to both the coronavirus and international trade disputes. 

“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,” they wrote.

An administration official told The Hill on Tuesday that the White House was considering federal assistance for the industry, but stressed that such assistance should not be considered a bailout. However, Democrats, including Markey, Merkely and Sanders, have described the possible aid as such.

The Washington Post first reported that the White House was considering assistance for oil and gas producers. Three people told the Post that the aid would probably be in the form of low-interest government loans to the shale companies.

The senators wrote in their letter to the president that a White House response should instead include increased funding for testing, research and vaccine development. 

“The effect that this disease is having on the American workforce, health care system, and economy is clearly illustrating the ramifications of this administration’s erosion of our safety net programs and its poor response to the crisis. These are actual crises that require urgent action; the loss of value of oil executives’ stock options is not,” they wrote. 

“We can better protect oil industry workers through policies that support workforce rights and a just, collaborative, and deliberative transition to a clean energy economy,” the lawmakers added. 

Major oil industry organizations have said they are not asking the Trump administration for assistance. 

“We are not in discussions with anyone at the administration at this time on any kind of program for the industry,” American Petroleum Institute President and CEO Mike Sommers told reporters on a press call on Monday.

He has since told Fox Business, “We want the market to work, so we’re not interested in what some people are proposing right now in terms of federal bailouts.”

Others have expressed support for some type of assistance. 

Harold Hamm, the executive chairman of oil producer Continental Resources, told The Washington Post that a government lending program “could be helpful.” 

Hamm also said that he had reached out to the Trump administration.

Russia declined last week to join the OPEC nations in agreeing to cut production in response to the slowdown in demand caused by the coronavirus.

In response, Saudi Arabia announced that it would increase its oil production, flooding the market and causing a sharp decrease in price.