While Congress considers restoring billions of dollars in green-energy subsidies, the Obama administration is tightening the financial screws on oil and gas companies.
President Barack Obama proposed a confiscatory $10.25-per-barrel tax on oil when West Texas crude was trading in the $30 range. Meantime, federal banking regulators are increasing their scrutiny of lenders doing business in the Oil Patch.
Bowing to pressure from the Federal Reserve, the Comptroller of the Currency and the Federal Deposit Insurance Corporation, “Banks will reduce most energy company credit lines by roughly 20-40 percent this month,” predicted Paul Tice, head of the Energy Capital Group at U.S. Capital Advisors Asset Management.
“This will lead to further cuts in financing for many cash-starved energy companies, turning a challenging credit situation into a potential liquidity crisis,” Tice said.
Other federal agencies are piling on.
The Environmental Protection Agency, seeking to curtail methane emissions from new oil and gas well, is now ramping up restrictions on existing wells.
The Interior Department has implemented stricter operating procedures on fracking on federal lands.
Tice says Washington’s “climate-change ideology” is chilling the energy sector’s bottom line.
“Many large U.S. banks have announced they will no longer finance coal mines or coal-fired power generation. Crude oil and natural gas productions may not be far behind,” he said.
The feds have made it their mission to run oil and gas out of business. Pursuing renewable energy is all well and good, but changes to the energy sector should come from the bottom up -- not from an overreaching federal government.
A Convention of States can put the people back in charge. By proposing constitutional amendments that limit the power and jurisdiction of the federal government, a Convention of States can turn the tables and tighten the screws on federal overreach.