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Texas Alliance of Energy Producers Resolution Urging Federal Action to Mitigate Losses from Extreme Market Circumstances as a Result of the COVID-19 Phenomenon

Apr 1, 2020

The Texas Alliance of Energy Producers is the largest statewide oil and gas association in the United States with over 2,600 members. The primary mission of the Alliance is to effectively represent the oil and gas industry in the State of Texas, and in particular to represent the interests of smaller independent oil and gas companies, including operators/producers, service companies, and drilling companies. 

Texas Alliance of Energy Producers Resolution Urging Federal Action to Mitigate Losses from Extreme Market Circumstances as a Result of the COVID-19 Phenomena, and World Oil Supply and Demand Imbalances

WHEREAS:

  • The American independent oil and gas industry is vital to the economy and critical to the economic and physical security of the United States;
  • The United States has largely achieved energy independence, dramatically lowered energy imports into the country, and established a long-term, abundant, affordable supply of energy for the benefit of US households and businesses;
  • The double threat of the COVID-19 pandemic destroying oil demand globally and the dispute between the Russian Federation and the Kingdom of Saudi Arabia, have combined to create a sudden extreme oversupply in crude oil, and a resulting shock to energy markets;
  • These unprecedented concurrent phenomena have led to severe instability in oil and gas markets and have caused crude oil prices to fall drastically over the last few weeks;
  • This instability and price reduction poses an existential threat to the American oil and gas industry, the millions of Americans employed by this industry, the unmatched consumer benefit achieved in the last 10 years, the thousands of independent oil and gas companies who would otherwise be viable, and potentially American national security.

THEREFORE BE IT RESOLVED THAT:  The Texas Alliance of Energy Producers urges the Trump Administration, the United States Congress and the agencies of the United States Federal Government to use every tool possible to improve the stability of oil markets to protect American energy independence. Tools that we, the Texas Alliance of Energy Producers, urge to be used include, but are not limited to:

  • Increasing diplomatic pressure on the countries responsible for dumping excess crude oil into global markets;
  • Acting as a mediator between the Russian Federation and the Kingdom of Saudi Arabia;
  • Utilizing Section 232 powers to determine whether US national security is or may be at risk by the actions of other crude oil producers/exporters;
  • Immediately authorizing appropriations for the purchase of additional crude oil for the Strategic Petroleum Reserve. Participating companies should be limited to US companies with 1,000 or fewer employees, and mechanisms should be developed to allow and facilitate smaller producers to aggregate barrels to sell into the SPR;
  • Regulatory forbearance to give energy lenders maximum flexibility in seeing oil and gas companies through this extraordinary market event, with particular emphasis on small business and smaller independent oil and gas companies, service companies, and drilling companies;
  • Reducing the regulatory burden across the federal spectrum by providing temporary exemptions from federal regulations affecting oil and gas companies with less than 100 employees, and;
  • Other measures as may be identified that appropriately address the current crude oil supply/demand imbalance, or that may assist oil and gas operators to weather the unprecedented market challenges they are facing.

Approved by the Board of Directors of the Texas Alliance of Energy Producers, April 1, 2020.

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