Main Street program at a crossroads, EPA to rescind methane regulations, and more

The Federal Reserve’s first-ever attempt to lend money to midsize businesses was destined to be a challenge. The push has proved to be an outright flop, according to a member of the oversight commission charged with monitoring it.

“By any measure, the Main Street program has been a failure,” Bharat Ramamurti, a member of the Congressional Oversight Commission, said at the group’s first-ever hearing on Friday.

For months, the Federal Reserve’s $600 billion Main Street lending program has been overshadowed by a lengthy rollout and little appetite from banks and businesses alike.

Now, the Fed is increasingly facing questions over whether relaxing the program’s rules might help facilitate more business loans, or whether it should try an entirely different approach to help mid-sized firms fighting for survival.

The dramatic reductions in asset valuations and decline in output show the depth of the pain in the second quarter. Fuel demand at one point was down by more than 30% worldwide, and still remains below pre-pandemic levels.

Several executives said they took massive writedowns because they expect demand to remain impaired for several more quarters as people travel less and use less fuel due to the ongoing global pandemic that has killed more than 700,000 people.

The Environmental Protection Agency is preparing to adopt new rules that would rescind regulations for methane-gas emissions, including ending requirements that oil-and-gas producers have systems and procedures to detect methane leaks in their systems, senior administration officials said.

The rule changes will apply to wells drilled since 2016 and going forward, and remove the largest pipelines, storage sites and other parts of the transmission system from EPA oversight of smog and greenhouse-gas emissions. The changes also ease reporting requirements for the industry and, for some facilities, how often a plant must check for leaks of other pollutants, the officials said.

The plunge in oil demand caused by the pandemic won't fix the climate crisis. But it could force the oil industry to accelerate a shift away from fossil fuels as executives try to carve out a future in clean energy.

What's happening: UBS analysts estimate that earnings in the sector were down 172% on average last quarter compared to the same period a year ago. That puts pressure on producers to make big strategy moves that companies have long resisted.