State Calls To Declare COVID-19 An “Act Of God”

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Governor Kevin Stitt called on President Donald Trump to declare the coronavirus pandemic an ‘Act of God’ to help oil firms in Oklahoma as they look to curtail or stop production until demand recovers.

In a letter sent to President Trump on Saturday, Governor Stitt asked the Administration to declare the pandemic an ‘act of God’, which, as per a U.S. code on oil pollution liability and compensation is “an unanticipated grave natural disaster or other natural phenomenon of an exceptional, inevitable, and irresistible character the effects of which could not have been prevented or avoided by the exercise of due care or foresight.”

Governor Stitt of Oklahoma wrote in his letter to President Trump that by declaring the COVID-19 pandemic an ‘Act of God’ or force majeure, the Administration would protect 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,” Gov. Stitt said.

“Over-production of oil continues to threaten the economy, posing many environmental threats to Oklahoma and other producing states with no demand and rapidly diminishing storage capacity,” the Governor noted.

Oklahoma Corporation Commission, the oil regulator in the state, passed last week an emergency order allowing oil producers to keep their leases if they shut production due to the very low oil prices, collapsing demand, and storage shortage.

Oil producers in Oklahoma and across the entire U.S. oil patch are curtailing production amid the glut and regional prices in the single digits because of lack of storage amid crashing demand.

Continental Resources is said to have stopped drilling operations and shut in most of its wells in North Dakota, ConocoPhillips is curtailing some production in Canada and the U.S. until market conditions improve—and these are just a few examples of large companies responding to the gloomy market conditions.