Source: United States House of Representatives – Congressman Scott Tipton (CO-03)
WASHINGTON—Congressman Scott Tipton (CO-03) joined with members of the House Energy Action Team in a letter addressed to Secretary of Treasury Steve Mnuchin and Chair of the Federal Reserve Jerome Powell, requesting that all industries receive equal access to the Main Street Lending Program (Main Street). This newly established program, created under the CARES Act, is intended to serve as a temporary lifeline for small and medium-sized businesses impacted by the COVID-19 outbreak. Unlike the Paycheck Protection Program, financial assistance from the Main Street program must be paid back with interest over the course of the loan’s term.
In the letter, the lawmakers cite concerns regarding the severity of the economic impact on the oil and gas industries created by reduced consumer demand and the price war between Saudi Arabia and Russia.
In part the letter reads, “As you may be aware, the United States leads the world in oil and natural gas production. However, the Coronavirus Disease 2019 (COVID-19) has greatly affected our economy as businesses across America have been forced to shut down or limit operations. The oil and gas industry is no exception. Global oil prices have declined nearly 60 percent since January 2020. The combination of drastically dropping demand due to the pandemic, a volatile market, the recent price war between Saudi Arabia and Russia, and U.S. oil storage at or near capacity has created a harrowing fate. On April 20th, oil contract prices dropped to an astonishing and unprecedented negative $37 for May delivery of U.S. crude.
“We appreciate President Trump urging the Department of Energy, the Department of the Treasury, and the Federal Reserve to work in unison to implement a plan to ensure liquidity is accessible for the oil and gas industry. America’s oil and natural gas industry supports 10.3 million jobs in the United States and nearly 8 percent of our nation’s Gross Domestic Product. It is crucial to keep the energy sector functioning and hard-working Americans employed, not only to retain U.S. energy dominance, but to rebuild our overall American economy.
“Therefore, we respectfully request that the Department of the Treasury and the Federal Reserve resist calls to limit industry or company eligibility with regards to accessing the Main Street Lending Program. The intent of Congress is clear, through the CARES Act, that the creation and implementation of this new program should encompass small and medium sized businesses, without discriminating by industry.”
According to the Colorado Oil and Gas Association’s 2019 economic impact report, the industry contributes nearly $1 billion in revenue to the state and local economies and supports nearly 90,000 jobs in Colorado.
The full letter can be found here.
More information on the Main Street Lending Program can be found here.