Spare A Thought, And $2.5 Billion, For America's Poor Oil Barons
Free market for me, but not for thee! The same people who spent years screaming that Barack Obama and the Democrats were "picking winners" and wasting tax dollars propping up "their pals" at clean energy companies like Solyndra are now demanding that American taxpayers bail out the oil industry. Because that train is never, ever late.
The Washington Post reports that billionaire oilman Harold Hamm reached out to the Trump administration after his personal stake in energy company Continental Resources lost $2 billion in value Monday. Not out of abject greed and a desire to socialize the risks while privatizing the profits, of course, perish the thought! But because "this could jeopardize those jobs and the economies in producing states and communities across America, from Pennsylvania to California and Texas to North Dakota." You bet!
Last weekend, just as global demand was dropping due to coronavirus, Russia told OPEC it was noping out of their deal to prop up oil prices by curbing production, causing oil futures to drop 31 percent. Because apparently Russia was listening, and they heard that they might be able to deliver a killing blow to American shale producers if they crashed the global oil market.
Which is just how capitalism goes, right? Free markets are intrinsically wise, and it would be vile socialism for the government to interfere!
Hamm said in an interview Tuesday he had reached out to the administration but had not made "direct" contact. He said that the administration should consider using laws on illegal dumping to prevent Russia and Saudi Arabia from slashing prices of oil sold in the United States.
Hamm said the administration should consider "any action that the administration might take to protect and preserve American interests at this time from being unfairly disadvantaged by whatever government — and we're talking governments here, whether it be Russia or Saudi Arabia."
Let's be clear, however, that Hamm was just fine when those governments were colluding to prop up the price of oil — lest we forget the "C" in OPEC stands for cartel. But now those countries have decided to pump their own oil and sell it for whatever the market will bear, and THIS AGGRESSION WILL NOT STAND, MAN!
According to the Post, the White House has been fielding frantic calls from its buddies in the dead dinosaurs industry. Not only do these guys want a federal bailout, TOOT SWEET, they're fighting mad that the government might further put a crimp in their oil revenues by implementing a paid sick leave policy. In a global pandemic.
But instead of telling these greedy sociopaths to go have a wank with Adam Smith's invisible hand, the Trump administration is puckering right up! We've got no plan for the tens of thousands of COVID-19 cases headed our way, but we sure as hell aren't going to leave those poor agents of global warming out in the cold.
Bloomberg reports that the government may buy up 78 million barrels of oil to help the industry. Gotta fill up that Strategic Petroleum Reserve when it's cheap, right? America is currently a net exporter of oil, but what better time than now to spend $2.6 billion to stash even more of the stuff in underground silos. What better use of funds could there be during a global pandemic than propping up the price of oil for a day or two?
And hey, while we're at it, how about we make it even cheaper for those poor, impoverished oil producers to get that shit out of the ground on government land?
Trump administration officials are seriously considering a separate idea to help some oil companies by lowering royalty rates for oil and natural gas extracted from federal land, according to two people familiar with the matter. Those rates are currently at 12.5% -- a rate established in 1920. The size and duration of the reduction being considered by the administration was not immediately clear.
It could be bitterly opposed in Congress, where Democrats and even some Republicans have criticized current royalty rates as too low, since they are often below what states and private landholders charge. Last month, Senator Chuck Grassley, a Republican from Iowa, joined Democratic Senator Tom Udall of New Mexico in advancing legislation to hike royalties and other payments for oil companies plumbing federal land.
Jeez, Chuck, get with the program!
Remember, remember the THIRD OF NOVEMBER.
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Liz Dye lives in Baltimore with her wonderful husband and a houseful of teenagers. When she isn't being mad about a thing on the internet, she's hiding in plain sight in the carpool line. She's the one wearing yoga pants glaring at her phone.