WASHINGTON (Sputnik) — The US administration is not going to do anything to help oil companies amid the current oil price fall as it is more concerned about environmental issues, former US Assistant Secretary of Energy Chuck McConnell told Sputnik.
“Interestingly enough, I don’t believe the United States government will do much if anything to help oil and gas companies,” McConnell said.
Global oil prices have significantly dropped compared to summer 2014, falling from $100 to $43 per barrel for Brent crude, primarily as a result of worldwide oversupply.
“Our [US] government really doesn’t do things to make companies have more success, it usually puts constraints in front of companies. It typically does not offer incentives or abilities to stay operational, unless that company might be a renewable energy company,” he explained.
The former official believes small US companies will be doing everything they can on their own “to ride through the downturn and be able to survive to get to the next upturn.”
“What we generally see during times like this is that the small companies often will be acquired, often will consolidate…But they’ll typically operate in a slower mode which means less investment,” McConnell explained.
In November 2014, OPEC decided to maintain oil production levels, accelerating a price decline that began in summer 2014. At the end of July, OPEC said it would not decrease oil production, preserving its production level at 30 million barrels per day.
According to the International Energy Agency (IEA), global oil prices will fall further in 2016 in response to decreased demand.
