Environmental security

‘Green power’ politics: Obama tightens screws on oil, gas

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.