White House Mulls Aid to Shale Companies

[applegrove]

White House Mulls Aid to Shale Companies

March 10, 2020 at 1:59 pm EDT By Taegan Goddard 203 Comments

https://politicalwire.com/2020/03/10/white-house-mulls-aid-to-shale-companies/

"SNIP.....

“The White House is strongly considering pushing federal assistance for oil and natural gas producers hit by plummeting oil prices amid the coronavirus outbreak, as industry officials close to the administration clamor for help,” the Washington Post reports.

“White House officials are alarmed at the prospect that numerous shale companies, many of them deep in debt, could be driven out of business if the downturn in oil prices turns into a prolonged crisis for the industry.”

.....SNIP"

[Coventina]

1. Fuck that shit.

Unless they nationalize the companies.

[Moostache]

5. Fuck it even IF they nationalize...

Aid from the government is going to be at a premium in the very near term, giving MORE of it to the fucking fossil fuel industry - unless targeting it for R&D to get OUT of fossil fuels entirely - is wasting precious resources further.

[Coventina]

7. Agreed. n/t

[C_U_L8R]

2. May as well bail out the horse and buggy companies too

And those poor rolodex makers.

Really WTF, WTF?

[Moostache]

6. Won't somebody PLEASE think of the horse whip producers???!?!!??!! (n/t)

[LaurenOlimina]

3. NO

[yonder]

4. What's that they like blabbing about: Laissez Faire?

Hands off? Let the marketplace decide? Only when it suits the Suits.

Otherwise, ignore the masses and let the average Joe twist in the wind.

[Igel]

12. Here's one view.

Want to stick it to Putin?

Prop up the shale-oil producers.


As an aside, notice that the cost of natural gas has increased in the last few days. Why? Because in Texas, much natural gas production is a byproduct of oil production. Reduce oil because of low per-barrel prices, reduce natural gas production and increase price per BTU.

Of course, that doesn't matter. Even if the reason coal's less common now for power generation was the low price of natural gas. Surely increasing gas prices won't make a difference. Since when does price affect behavior? (Quick: Catch the contradiction!)


As for the average Joe, a lot of them work the oil fields. And, long term, a lot of them may like cheap gas now but won't like it when it's much more expensive in the long term. (Which, for many, means past their next paycheck.)

[yonder]

14. Yes, good perspective.

[Newest Reality]

8. Awww...

It's so nice when you have Daddy there to bail you out when things don't go your way. Idda widdle babee cwying? Trump knows how that works. You get to do anything, take risks, and even be immune to catastrophes if needs be. That's so cooool! Wow.

We will allow no failures for the Captains of Industry and if you have a problem that, (get ready to salivate) JOBS! JOBS! JOBS! That usually works to calm the unwashed masses and the useless eaters.

Oh, welfare, socialism, whatever! Capitalism is working as we see! Or, wait, we are working for capitalism? Maybe we only exist for the sake of capitalists? That may be the case. Well, at least we know that we are all on our own and now excuse me while I go look for some bootstraps because I need a lift.

Now, be sure to be and remain expendable. That's your civic duty, proles! Throw yourselves into the churning gears of industry and progress if asked. Ask not what capitalism can do for you, but what you can do without for capitalism.

[gratuitous]

9. Isn't this socialism, as defined by right-wing knuckleheads?

Except this is going to industries close to the administration. So no, not socialism. Not a government handout. Vital assistance to a backbone industry. Jawbs!

[MoonlitKnight]

10. Note the comment regarding "deep in debt"

This is the hidden financial bomb that is going to blow up with regard to falling oil prices.

And the oil war is being pushed as a dispute between Saudi and Russia. But is more likely an effort to kill the US oil shale business, which has made the US a net exporter. There are lots of environmental reasons to cheer for this. But any administration not beholden to Putin and the Saudis wouldn’t be standing silently. The bailout would be to address the more widespread economic crisis that would result from all of those junk bonds and derivatives defaulting.

[VOX]

11. It's a Putin thing. (Link )

Per the Los Angeles Times, 03/09/2020:
https://www.google.com/amp/s/www.latimes.com/business/story/2020-03-08/oil-price-war%3f_amp=true
How Putin spurned the Saudis to start a war on America’s shale oil industry
By ILYA ARKHIPOV, WILL KENNEDY, OLGA TANAS AND GRANT SMITH
<snip>
For more than three years, President Vladimir Putin had kept Russia inside the OPEC+ coalition, allying with Saudi Arabia and the other members of the Organization of the Petroleum Exporting Countries to curb oil production and support prices. On top of helping Russia’s treasury — energy exports are the largest source of state revenue — the alliance brought foreign policy gains, creating a bond with Saudi Arabia’s new leader, Crown Prince Mohammed bin Salman.

But the OPEC+ deal also aided America’s shale industry, and Russia was increasingly angry with the Trump administration’s willingness to employ energy as a political and economic tool. It was especially irked by the United States’ use of sanctions to prevent the completion of a pipeline linking Siberia’s gas fields with Germany, a project known as Nord Stream 2. The White House has also targeted the Venezuelan business of Russia’s state oil producer Rosneft.
<snip>
Rosneft is delighted with the breakup. It can now move to boost its market share, said spokesman Mikhail Leontiev.

“If you always give in to partners, you are no longer partners. It’s called something else,” he told Bloomberg. “Let’s see how American shale exploration feels under these conditions.”

But the decision to take on shale could backfire. Although many drillers in Texas and other shale regions look vulnerable, as they’re overly indebted and already battered by rock-bottom natural gas prices, significant declines in U.S. production may take time. The largest American oil companies, Exxon Mobil Corp. and Chevron Corp., now control many shale wells and have the balance sheets to withstand lower prices. Some smaller drillers may go out of business, but many will have bought financial hedges against the drop in crude.
<snip>
In the short run, Russia is in a good position to withstand an oil price slump. The budget breaks even at a price of $42 a barrel and the finance ministry has squirreled away billions in a rainy-day fund. Nonetheless, the coronavirus’ effects on the global economy are still unclear and with millions more barrels poised to flood the market, Wall Street analysts are warning oil could tumble below recent lows of $26 a barrel.
<snip>

[pecosbob]

13. As the above posted noted, it's about Putin wanting the oil-shale industry to go away

and it should...not to indicate that I in any way support the current Russian regime, but the oil-shale industry is bad.