Published 13:14 IST, April 28th 2020
Oklahoma governor asks Donald Trump to declare COVID-19 an 'Act of God'
Oklahoma Governor Kevin Stitt wrote a letter to Donald Trump urging him to declare the COVID-19 pandemic an 'Act of God' in order to safeguard the oil industry.
Oklahoma Governor Kevin Stitt on April 26 wrote a letter to the United States President Donald Trump urging him to declare the coronavirus pandemic an 'Act of God' in order to safeguard the domestic oil and gas industry. Last week, the oil prices for the first time in history dropped below zero due to overproduction and decreasing demand amid the lockdown.
"Over-production of oil continues to threaten the economy, posing many potential environmental threats to Oklahoma and other producing states with no demand and rapidly diminishing storage capacity. This could lead to difficult decisions for producers regarding where to position these hydrocarbons with no place to store them and no one to buy them," Still wrote in his letter.
"We are asking your administration to declare the COVID-19 pandemic a 'force majeure' or 'act of God' for the narrow purpose of protecting these producers from actions to cancel leases held by production as a result of production stoppage. This will be a necessary step to encourage and support those operators who choose to stop production until demand returns and storage becomes readily available," Stitt added further.
Decreasing oil demand
According to reports, the coronavirus outbreak has lowered the demand for crude oil in the international market by 30 million barrels per day. The United States became the largest oil producer last year taking its capacity to 13 million barrels a day, but the decreasing demand caused by the pandemic is making the producers wary of their next move. As per reports, Oklahoma's energy regulator warned that the current production can be considered economic waste because the companies are producing more with demand is at its lowest in decades.
(Image Credit: AP)
Updated 13:14 IST, April 28th 2020