Texas Insider Report: AUSTIN, Texas – (HOUSTON, Texas) - U.S. Sens. Ted Cruz (R-Texas), Kevin Cramer (R-N.D.), and colleagues in the Senate sent a letter to Treasury Secretary Steven Mnuchin, Energy Secretary Dan Brouillette, and Federal Reserve Chairman Jerome Powell on Tuesday urging them to make credit facilities accessible to domestic energy producers.
In the letter they wrote:
"We face a real and present danger of seeing hundreds, if not thousands of oil producers shuttering, an event that will profoundly and negatively impact the industry, its financial partners and consumers for years to come. The prospect of once again becoming reliant on oil imports is an unacceptable situation and we should do all we can to avoid it, we call upon the Administration and the Federal Reserve to focus on this dire situation immediately and craft a swift response to head-off this growing emergency.
"Our energy producers should not be unfairly excluded from credit due to an arbitrary date and their viability should be protected with enhanced support for their credit and access to capital, assisting these companies could be the difference between maintaining our domestic energy production and workforce or shedding more U.S. jobs and returning to dependence on foreign sources of oil."
"Our energy producers should not be unfairly excluded from credit due to an arbitrary date and their viability should be protected with enhanced support for their credit and access to capital, assisting these companies could be the difference between maintaining our domestic energy production and workforce or shedding more U.S. jobs and returning to dependence on foreign sources of oil."
Sens. Cruz and Cramer were joined on the letter by Sens. John Barrasso (R-Wyo.), Lisa Murkowski (R-Alaska), Mike Enzi (R-Wyo.), Dan Sullivan (R-Alaska), Jim Inhofe (R-Okla.), Steve Daines (R-Mont.), John Hoeven (R-N.D.), Roger Wicker (R-Miss.), and Cindy Hyde-Smith (R-Miss.).
In the letter, the senators call on the Administration and the Federal Reserve to:
- Change the date of the required credit rating to early March. The current date in the term sheet is March 22. Changing the date means company ratings would predate market manipulations from the Saudi Arabia and Russia oil dispute in addition to demand losses from COVID-19.
- Change the required number of credit ratings on the term sheets to one. Currently, companies with multiple credit rating must have at least two rating agencies concur on the company's score.
- Provide additional flexibility on the credit score requirements, allowing energy companies to access credit facilities.
The letter can be read here.
