In the News

House Democrats push leadership for oil-industry lifeline

Washington, April 6, 2020

Brian Dabbs, National Journal

 April 6, 2020, 7:21 p.m.

A group of House Democrats are joining the fight to prop up a U.S. oil and gas industry beleaguered by a coronavirus-driven demand plunge and an ongoing global price war.

Rep. Henry Cuellar of Texas, a fossil-fuel-industry ally who narrowly defeated a popular progressive primary challenger last month, is spearheading a letter to pressure congressional leadership to authorize a Strategic Petroleum Reserve purchase in the phase four rescue package.

And at least four other Democrats, all of whom represent oil- and gas-heavy districts, are jumping on board alongside Rep. Mike Conaway and Republicans.

The SPR purchase push marks the most aggressive Democratic attempt to aid the oil industry in the wake of the coronavirus outbreak. The lawmakers are expected to deliver the letter, which is being reported first by National Journal, to congressional leadership on Tuesday.

“Congress should take action now by providing resources to replenish the Strategic Petroleum Reserve,” Rep. Kendra Horn of Oklahoma, who is signed on to the letter, said in a statement. “As we craft the next stimulus package, I am proud to work with members from both parties to fight for our nation’s oil and gas workers in this difficult time.”

Some campaign consultants say support for the oil and gas industry could give purple-district Democrats an edge in fierce reelection battles this November. The pressure on leadership is also, however, likely to exacerbate tensions between House Democrats and environmental hawks off Capitol Hill.

“Our response to the coronavirus needs to prioritize people in immediate need. Anything that looks like a corporate bailout is obviously unacceptable,” said Lukas Ross, senior policy analyst at Friends of the Earth. “One Democrat taking the oil industry’s side at a moment like this is too many.”

Senate Democrats jettisoned a $3 billion petroleum-reserve purchase from the Phase 3 rescue package. The Energy Department now plans to rent storage in the reserve, a set of four storage caverns in Louisiana and Texas designed to insulate the U.S. from the global oil market.

But environmental groups have grown increasingly frustrated with House Democrats after leadership failed to boost renewable-energy credits in the December tax package or secure climate provisions in the new North American free trade agreement.

The Democratic Congressional Campaign Committee is putting its full weight behind oil-district members, arguing that the House majority hinges in part on their victories. Horn, as well as Reps. Lizzie Fletcher and Colin Allred of Texas, Xochitl Torres Small of New Mexico, and other Democrats representing oil and gas districts, are part of the DCCC’s Frontline program.

House Majority PAC, an organization focused on maintaining the Democratic majority this cycle, announced Monday that it is reserving $5.1 million to run television advertisements in Texas in the final weeks of the campaign. That’s one-tenth of the total reserved sum.

Texas produces more than 40 percent of U.S. oil. The Texas Oil and Gas Association says the industry creates roughly 430,000 jobs with an average salary of more than $125,000.

The Dow and S&P registered a banner day Monday, but the price of U.S. oil dropped to around $26 per barrel. A meeting between Saudi Arabia and Russia to control supply and raise global prices is set for Thursday.

Despite the tensions between the environmental community and House Democrats, the lower chamber under Speaker Nancy Pelosi is prioritizing renewable energy over fossil fuels. Democrats have released a suite of bills to mandate economy-wide net-zero emissions in the coming decades, and climate hawks on Capitol Hill are pushing a ban on new fracking, an extraction technique that has helped to make the U.S. the largest oil and natural-gas producer globally.

Fletcher broke with her party to be the only Democrat to sign on board a March letter urging royalty relief for oil and gas companies. Now, she’s also inking the Cuellar letter.

“In my district, there are a lot of oil-field-services companies. And they’ve been working out in the Permian [Basin]. They’ve been working on what has been a really incredible renaissance for domestic energy production,” said Fletcher, who represents a Houston-area district. “It’s my job and my responsibility to think about the challenges that we’re facing here.”

A spokesperson for Pelosi declined to comment on the Cuellar letter.

Houston is often regarded as the energy capital of the world, and campaign operatives say lawmakers need to put in place policies and campaign platforms that reflect local dynamics.

“Their job is to represent every sector in their local economy,” said Dan Sena, who was the DCCC executive director for the 2018 election cycle and now runs Sena Kozar Strategies. “And if there’s a part of it that you intentionally exclude, if there’s a part of it that you intentionally push aside, it makes it much harder for Democrats to not only win that seat but to retain it.”

During a summit with energy executives Friday at the White House, Energy Secretary Dan Brouillette said his department identified an “alternative financing mechanism” to fund the Strategic Petroleum Reserve purchase after the money didn’t make it into the last rescue package.

But a spokesperson for Brouillette confirmed to National Journal that Congress will still have to authorize the funds.

"The Department will continue to work with Congress to deliver on the President's directive to provide relief to the American energy industry during this tumultuous time," Energy Department press secretary Shaylyn Hynes said.