Western Oil Companies To Bolster Presence In China’s Arch Rival

By Simon Watkins - Mar 21, 2023, 3:00 PM CDT

• The signing of a MoU between TotalEnergies and India’s ONGC to explore for crude oil in deepwater blocks off India’s coast marks a new step in international relations.
• India’s role as the US counterpoint to China in the Indo-Pacific region is growing.
• Questions have remained on which way India will jump in the reordering of the global oil markets that is currently underway.

The signing of a memorandum of understanding (MoU) between India’s largest crude oil and natural gas company in India, Oil and Natural Gas Corp (ONGC), and France’s leading energy oil and gas firm, TotalEnergies, as recently tweeted by the French company, may open the way for a renewed push by Western companies in China’s arch rival in the Far East. This, in turn, might begin to shift momentum back into the US’s longstanding plans for India to act as a key counterbalance to China’s ever-increasing influence in the Indo-Pacific region. The MoU between TotalEnergies and ONGC is geared towards the initial exploration of deepwater blocks, especially in and around Mahanadi and Andaman off India’s east coast, according to the French company’s tweet. Towards this end, ONGC last year also signed a heads of agreement with U.S. oil giant ExxonMobil for deepwater exploration on India’s east and west coasts. This latter deal will focus on the exploration of the Krishna Godavari and Cauvery Basins in the eastern offshore area and the Kutch-Mumbai region in the western offshore. According to ONGC’s director of exploration, Shri Rajesh Kumar Srivastava, the collaboration between it and ExxonMobil is likely to last for many years and will be a key part of ONGC’s ability to ensuring energy security for India. 

These long-term strategic energy partnerships between flagship Western oil companies and India are precisely what the U.S. had envisioned back in 2019 when it was putting together its ‘relationship normalisation deals’ initiative. This initiative had originated in the aftermath of the U.S.’s unilateral withdrawal from the Joint Comprehensive Plan of Action (JCPOA, or colloquially, ‘the nuclear deal’) in May 2018, as analysed in-depth in my latest book on the global oil markets. From that point, Israel’s concerns about Iran’s nuclear program escalated and the U.S. knew that any major attack by Israel against Iran could well be a catalyst for a broader conflict across the entire Middle East. This, in turn, could eventually draw China and Russia as key sponsors of Iran into direct opposition to the US, a key sponsor of Israel. The U.S. also knew that several of its remaining allies in the Middle East shared Israel’s fear about Iranian intentions following the U.S. withdrawal from the JCPOA. In an attempt to counterbalance these fears, the administration under then-U.S. President Donald Trump came up with the relationship normalisation deals initiative. On 13 August 2020, it was announced that Israel and the United Arab Emirates (UAE) would normalise relations in a deal that had been brokered by the US – the first of the relationship normalisation deals program. 

Related: The Age Of The U.S. As A Middle East Power Broker Is Over

For the program to work effectively for the long term, though, the U.S. needed a substitute big buyer of energy to China be found that could form a unified oil and gas supply and demand network with the US and its allies at the centre, rather than China and Russia. Both Beijing and Moscow were targeting the same countries as the U.S., with the exception of Iran, and had two significant advantages over the U.S. in attracting politically wavering Middle Eastern countries to their sphere of influence. First, Russia was the key player – alongside Saudi Arabia – in the ‘OPEC+’ oil supply alliance. Second, China was the big buyer in the global oil demand pool. Therefore, the U.S. posited, the substitute buyer for China had to be big and full of promise, and the obvious candidate was India. 

India’s role as the US counterpoint to China in the Indo-Pacific region was further underlined by data released in the first quarter of 2021 by the IEA. This showed that India would make up the biggest share of energy demand growth - at 25 percent - over the next two decades, as it overtook the European Union as the world’s third-biggest energy consumer by 2030. India’s energy consumption was expected to nearly double as the nation’s GDP expanded to an estimated USD8.6 trillion by 2040 under its national policy scenario. This was underpinned by a rate of GDP growth that added the equivalent of another Japan to the world economy by 2040, according to the IEA. Politically as well, there had been several developments – also analysed in-depth in my latest book on the global oil markets – that pointed to India finally making substantive progress on its ‘Neighbourhood First’ policy as an alternative to China’s ‘One Belt, One Road’ initiative.

The U.S.’s vision of the intertwining of the relationship normalisation deals initiative with the economic and political development of India was initially illustrated through an early series of major oil deals between the UAE and India. Perhaps the most notable of these was the landmark decision by India that allowed the Abu Dhabi National Oil Company (ADNOC) to export oil from the country’s vitally-important strategic petroleum reserves (SPR) if there was no domestic demand for it. This was in line with ADNOC being the only overseas company allowed to hold and store any part of India’s SPR. Another sign of the UAE and India developments moving in the way that the U.S. wanted for its ‘relationship normalisation deals’ model was ADNOC being put ‘top of the list’ of foreign companies being considered as the lead buyer in the high-profile privatisation of major Indian refiner, Bharat Petroleum. Russian state corporate proxy, Rosneft, had expressed an interest in buying the Indian government’s 53.29 percent stake in the company at that time but had been subsequently side-lined by ADNOC.  

Since then, and especially in light of India’s equivocal stance on Russia just before and after its invasion of Ukraine in February 2022, questions have remained on which way India will jump in the reordering of the global oil markets that is currently underway. However, with the world’s third biggest oil importer and consumer, currently shipping in over 85% of its oil from overseas, India still remains in play as far as the West is concerned. The country is recovering economically from the effects of COVID-19 at a  slower pace than had been expected and is therefore looking to monetise its oil and gas resources as quickly as possible to minimise energy import costs. ExxonMobil’s prime position in several major sites and TotalEnergies’ new MoU have significantly bolstered the existing presence of Western firms in India to take advantage of this situation. September 2022 saw ONGC sign another agreement, with Chevron New Ventures (a subsidiary of U.S. energy giant, Chevron), to assess exploration potential in India. This deal is geared towards exploring the geologically challenging and difficult developments in Category-I, II and III of India’s sedimentary basins.

By Simon Watkins for Oilprice.com

Kuwait Oil Company Declares State Of Emergency After Onshore Oil Spill

By Tsvetana Paraskova - Mar 20, 2023, 7:03 AM CDT

Kuwait Oil Company, the state-owned firm of one of OPEC’s largest producers, on Monday declared a state of emergency following an oil spill on land.

No people have been injured and oil production has not been disrupted after the incident, the company was quoted as saying by AFP.

An oil leak has occurred in the west of the country, Kuwait Oil Company said.

Kuwait’s Al Rai newspaper published a photo of oil gushing out of an oil well, also saying that there have not been injuries reported or any disruption to production.

No toxic fumes have been reported, either, company spokesman Qusai al-Amer was quoted as saying.

The leak “occurred on land but not in a residential area”, the spokesperson later told AFP, but declined to specify the exact location of the spill.

Kuwait Oil Company has already sent emergency response teams to determine the source of the leak and contain the oil spill, the spokesman added.

Previously, the company reported oil spills from the fields it operates in 2016 and in 2020.

Kuwait, one of the largest producers in OPEC, pumps around 2.7 million barrels of per (bpd) of crude oil. At 2.683 million bpd production in February, per OPEC’s secondary sources, Kuwait is the fourth-largest OPEC producer after Saudi Arabia, Iraq, and the United Arab Emirates (UAE).

Kuwait, alongside Saudi Arabia and the UAE, is one of the few major oil-producing countries to target an increase it its oil production capacity. Kuwait has a plan to boost its production capacity to 4.75 million bpd by 2040.

Scott Sheffield, CEO at the largest pure-play shale producer, Pioneer Natural Resources, told the Financial Times on the sidelines of CERAWeek earlier this month, “I think the people that are in charge now are three countries — and they’ll be in charge the next 25 years.” “Saudi first, UAE second, Kuwait third.”

By Tsvetana Paraskova for Oilprice.com

Female-owned businesses on the rise, but barriers persist: study

Sammy Hudes, The Canadian Pres

The number of businesses owned by women is on the rise in Canada, but female entrepreneurs still disproportionately face barriers such as lack of access to capital from financial institutions, according to a new study.

The Women Entrepreneurship Knowledge Hub's 2023 State of Women’s Entrepreneurship in Canada report, released Monday, suggests the proportion of majority women-owned businesses is increasing. 

The study estimated 18 per cent of businesses are majority-owned by women, up from 16.8 per cent in 2020 and 15.6 per cent in 2017.

Lead researcher Wendy Cukier, the founder of Toronto Metropolitan University's Diversity Institute, said she is also encouraged that the gender gap related to early interest in entrepreneurship and innovation is shrinking.

Women entrepreneurs showed an increase in the total early-stage entrepreneurial activity (TEA) rate compared with men from 2021 to 2022, per the report (TEA is the percentage of the adult population between 18 and 64 who are either starting or running a new business). The TEA rate for women was 65 per cent of the TEA rate for men in 2021, jumping to 81 per cent of the rate for men last year.

“It’s always glass half empty or half full,” said Cukier.

“From my point of view, it could be far worse, and it would be far worse had there not been some significant investments and focus on women entrepreneurship in the last few years.”

That includes the federal government’s Women Entrepreneurship Strategy, launched in 2018, meant to increase women-owned businesses’ access to financing and expertise, through nearly $7 billion in funding.

But the report recommended further aid be provided to help women-owned businesses get off the ground and stay afloat.

It showed majority male-owned businesses have higher survival rates than majority female-owned businesses. After 10 years, around 58 per cent of female-owned businesses tend to stick around, compared with 62 per cent of male-owned businesses.

Female entrepreneurs also tend to be concentrated in service sectors, such as retail trade, knowledge-based industries, and tourism, leaving them under-represented in other, male-dominated fields, the study found.

“If you apply a gender lens to the innovation and entrepreneurship ecosystem in a very systematic way, which is what we're doing, you uncover all sorts of hidden bias, and you also create opportunities to rethink how we justify investments,” said Cukier.

“One of the key things we have to do is question some of the assumptions that have tended to shape a system that I would argue was created by men, for men.”

The report suggested those systemic biases continue to play out as women face barriers such as access to financing, whether it be in the form of loans, venture capital or angel investing.

The report also highlighted the disproportionate challenges faced by Indigenous and racialized women in the space.

It cited Statistics Canada data showing the proportion of Indigenous and diverse women entrepreneurs with intersecting identities declined between 2017 and 2020.

Both Black and Indigenous women face additional barriers when trying to access financial services, including those related to costs and lack of networking opportunities, according to the report.

It noted that immigrant women, many of whom are racialized, are half as likely to become entrepreneurs as immigrant men.

"For Black women entrepreneurs, we're faced with intersectional discrimination and biases, making it more difficult to succeed," said Nadine Spencer, CEO of the Black Business and Professional Association, which was also involved in drafting the report.

"When you look at the fact that Black women have limited access to financing, this means that our ability is limited to start and grow our business."

Spencer said she's optimistic that those in positions of power are listening to concerns about those challenges, citing Ottawa's Black Entrepreneurship Program, which allocated $265 million over four years to help Black entrepreneurs grow their businesses.

"As a Black entrepreneur, I think even myself when I started, the fact that I could speak to a mentor, I could work with the bank and even have government as part of part of my ecosystem just wasn't a thing," she said.

"When you focus on economic inclusion and providing targeted support and resources specifically to a demographic that is under-represented and underserved, it's able to give us access to some degree so we can make inroads."

This report by The Canadian Press was first published March 20, 2023.

N.W.T. diamond mine reports spill of 450M litres of wastewater

The Canadian Press

The Diavik Diamond Mine in the Northwest Territories says 450 million litres of wastewater spilled due to a broken pipeline.

The spill took place on Feb. 7 but wasn't reported until late last week.

The Northwest Territories government says pipeline operators did not believe it needed to be reported as the wastewater leaked into a containment pond that was its final destination.

The government says its inspectors have confirmed the spill is within the pond and none has been released into the environment.

The spill report says the water used in mining operations contains sewage and mine tailings and the area of contamination is 5,000 cubic metres.

The Northwest Territories government says it has requested that Diavik divert and repair the pipeline and that the company is addressing the issue appropriately.

The mine is roughly 300 kilometres northeast of Yellowknife and is owned by Rio Tinto, a global mining giant that has head offices in the United Kingdom and Australia.

This report by The Canadian Press was first published March 21, 2023.

Federal minimum wage rising to $16.65 per hour on April 1

The Canadian Press

The federal minimum wage is rising to $16.65 per hour on April 1, up from $15.55. (THE CANADIAN PRESS/Adrien Veczan)

The federal minimum wage is rising to $16.65 per hour on April 1, up from $15.55.

The government says the increase is based on the consumer price index, which rose 6.8 per cent in 2022.

The federal minimum wage applies to the federally regulated private sectors, including banks, postal and courier services, and interprovincial air, rail, road, and marine transportation. 

Ottawa set a federal minimum wage of $15 per hour in 2021 and increases it each year based on inflation.

The changes are made every year on April 1.

Where the provincial or territorial minimum wage rate is higher than the federal rate, employers must apply the higher amount.

This report by The Canadian Press was first published March 21, 2023.

The USMCA's self-destruct button: review clause conjures fears of 2018 all over again

James McCarten, The Canadian Press

It's been less than three years since the U.S.-Mexico-Canada Agreement replaced NAFTA as the law of the land in continental trade, and there are already hints of the existential anxiety that preceded it.

That's because of the so-called "sunset provision," a clause that reflects the lingering working-class distrust of globalization in the U.S. that helped Donald Trump get elected president back in 2016. 

Article 34.7 of the agreement, the "review and term extension" clause, establishes a 16-year life cycle that requires all three countries to sit down every six years to ensure everyone is still satisfied. 

That clock began ticking in the summer of 2020. If it runs out in 2026, it triggers a self-destruct mechanism of sorts, ensuring the agreement — known in Canada as CUSMA — would expire 10 years later without a three-way consensus.

For Canada, the sunset provision "is a minefield," said Lawrence Herman, an international trade lawyer and public policy expert based in Toronto.

"It is certainly not a rubber-stamping exercise — far from it."

Of particular concern is the fact that the provision doesn't spell out in detail what happens if one of the parties indicates that it won't sign off on extending the deal without significant changes to the terms. 

"The concern is that this could mean, in effect, that we'll be into a major renegotiation of CUSMA in 2026," by which time the political landscape in both the U.S. and Mexico could look very different, Herman said.

"What happens then? The government and business community need to be thinking about this and start preparing the groundwork and doing contingency planning now." 

The deal as it stands is hardly perfect, if the number of disputes is any indication. 

In the 33 months since USMCA went into effect in July 2020, 17 disputes have been launched among the three countries, compared with a total of 77 initiated over the course of NAFTA's 25-year lifespan. 

The U.S. remains unhappy with how Canada has allocated the quotas that give American dairy producers access to markets north of the border. Canada and Mexico both took issue with how the U.S. defined foreign auto content. And Canada and the U.S. oppose Mexico favouring state-owned energy providers.

The Canada-U.S. disputes are likely to be on the agenda when Prime Minister Justin Trudeau sits down later this week in Ottawa with President Joe Biden, his first official visit to Canada since being sworn in two years ago. 

"The president's really excited about doing this, about going up there and really going to Ottawa for no other purpose than the bilateral relationship," National Security Council spokesman John Kirby told the White House briefing Monday. 

Prior meetings between the two have typically been on the margins of international summits or at trilateral gatherings with their Mexican counterpart, Andrés Manuel López Obrador. 

Kirby cited climate change, trade, the economy, irregular migration and modernizing the continental defence system known as Norad as just some of "a bunch of things" the two leaders are expected to talk about.

"He has a terrific relationship with Prime Minister Trudeau — warm and friendly and productive."

Trade disputes notwithstanding, the overwhelming consensus — in Canada, at least — is that USMCA is vastly better than nothing. 

"I don't want to be alarmist about this, but we cannot take renewal for granted," said Goldy Hyder, president and CEO of the Business Council of Canada, after several days of meetings last week with Capitol Hill lawmakers. 

Constantly talking up the vital role bilateral trade plays in the continent's continued economic health is a cornerstone of Canada's diplomatic strategy. The message Hyder brought home from D.C.? Don't stop now.

"We met several senators, we met people from the administration, and their message was, 'Be down here. Make your case. Continue to remind Americans of the role that Canada has in their economy,'" he said. 

"We've got to … be a little less humble in the United States and start reminding Americans just how much skin in the game that they have in Canada."

That can be a challenging domestic political truth in the U.S., where deep-seated resentment over free trade in general and NAFTA in particular metastasized in 2016 and persists to this day. 

Biden likes to put a blue-collar, Buy American frame around policy decisions. His original plan to advance electric-vehicle sales saved the richest incentives for vehicles assembled in the U.S. with union labour.

Aggressive lobbying by Canada helped avert a serious crisis for Canada's auto sector; the Inflation Reduction Act that Biden ultimately signed included EV tax credits for vehicles assembled in North America. 

For many, it was a cautionary tale about the importance of arguing Canada's interests in Washington. 

A strong U.S. depends on a strong Canada, said Rob Wildeboer, executive chairman and co-founder of Ontario-based auto parts supplier Martinrea International Inc., who took part in last week's D.C. meetings.

"The USMCA and the ability to move goods across borders is extremely important to us, it's extremely important to our industry, it's extremely important to this country, and it's a template for the things we can do together with the United States," Wildeboer said. 

"In order for the U.S. to be strong, it needs strong neighbours, and Canada's right at the top of the list."

This report by The Canadian Press was first published March 21, 2023.

Canada faces US$15B loss on oil pipeline, Morningstar says

Robert Tuttle, Bloomberg News

Canadian taxpayers may end up taking a loss of $20 billion (nearly US$15 billion) on the government-owned Trans Mountain Pipeline after costs to expand it skyrocketed, according to Morningstar Inc. 

Prime Minister Justin Trudeau’s government will probably get no more than $15 billion when it goes to sell Trans Mountain — and possibly much less, Morningstar analyst Stephen Ellis said in an interview. 

The government paid Kinder Morgan Inc. $4.5 billion for the system in 2018 after the midstream company threatened to cancel plans to nearly triple its capacity to 890,000 barrels a day. The cost of that project has soared to about $31 billion because of a range of factors including supply-chain challenges. 

“At a $31 billion investment cost, no way the pipeline is going to recover costs,” Ellis said. 

Trans Mountain is Canada’s only oil pipeline to tidewater, moving crude from Alberta to the British Columbia coast near Vancouver. The government bought it because it considers the expansion to be economically important, giving oil shippers the option to export their product to markets other than the U.S. 

“When complete, the Trans Mountain expansion will ensure Canada receives fair market value for our resources as we work to achieve net-zero by 2050,” Adrienne Vaupshas, a spokesperson for Finance Minister Chrystia Freeland, said by email. 

But Trans Mountain has to compete with Enbridge Inc.’s much-larger system that carries Canadian crude into the US as far as the Gulf Coast. That will limit the tolls Trans Mountain can charge the 20 per cent of oil shippers without contracts, keeping the returns for the pipeline “very low,” Ellis said. 

The government’s best option would to try to sell Trans Mountain to a consortium of companies that could absorb lower returns on the conduit by expanding their existing oil facilities, such as storage tanks and other pipelines that connect to it. 

A number of Indigenous groups have formed to seek an ownership stake in Trans Mountain but, so far, Pembina Pipeline Corp. is the only established pipeline company to openly express interest in buying it. The expansion is 80 per cent complete and scheduled to go into operation by the first quarter of next year.

The government says Trans Mountain is in the “national interest,” providing a route to Asian markets. Without it, Canada is beholden to one buyer — the U.S. — for its oil exports. 

“TD Securities and BMO Capital Markets have provided a public value analysis of the project, which confirms that third-party financing is a feasible option to fund the completion of the project and believe that both strategic and financial investors would participate in a divestment process” once the project is complete, Vaupshas said. 

 

Indigenous-led prospective buyer 'not going away' even as Trans Mountain costs spiral

Amanda Stephenson, The Canadian PresS

An Indigenous-led initiative is still pursuing ownership of the Trans Mountain pipeline, in spite of the project's ballooning price tag.

"We are not going away, just because it's $30.9 billion. We are entering into the early stages of negotiations," said Stephen Mason, managing director of Project Reconciliation, a Calgary-based group that is working to facilitate the purchase of a major equity stake in the pipeline for the 129 First Nations along the route.

"Yes, there are a couple of other proponents out there, but I think the federal government has recognized our readiness."

The Trans Mountain pipeline — Canada's only pipeline system transporting oil from Alberta to the West Coast — was bought by the federal government for $4.5 billion in 2018 after previous owner Kinder Morgan Canada Inc. threatened to scrap the pipeline's planned expansion project in the face of environmentalist opposition.

Construction on the expansion is still ongoing, and is expected to be completed later this year.

However, capital costs of the project have been steadily spiralling. Last week, Trans Mountain Corp. announced its estimated price tag for the project has increased once again, this time to $30.9 billion — a 44 per cent increase from the $21.4 billion cost projection placed on the pipeline expansion project a year ago, and more than double an earlier estimate of $12.6 billion.

The federal government has indicated it does not wish to be the long-term owner of the pipeline, and has said it is open to the idea of Indigenous ownership.

But due to existing contractual agreements with oil shippers, only 20 per cent to 25 per cent of the rising capital costs of the project can be passed on to oil companies in the form of increased tolls. (Tolls are the rates oil companies pay to shift product on a pipeline, and they are how the pipeline company makes money).

A report from the Parliamentary Budget Officer last June found the federal government stands to lose money from its investment in the pipeline, and suggested that if the project were cancelled at that time, the government would need to write off more than $14 billion in assets.

Mason did not say what his group is prepared to bid for a stake in the pipeline, but he said the ultimate selling price will only be what a buyer is willing to pay and will therefore reflect the anticipated return on investment.

“It’s commercial value. It doesn’t matter (who the buyer is), they will only pay what the commercial value is and what the tolls will support," he said.

Project Reconciliation is pursuing a "minimum of a 30 per cent equity stake" in Trans Mountain, Mason said, which would mean not just economic benefits for Indigenous communities but Indigenous governance leadership through the Trans Mountain Corp. board of directors.

An equity stake that large in a major piece of energy infrastructure in this country would be precedent-setting for Indigenous communities. By contrast, the Coastal GasLink pipeline, which is also currently under construction, has option agreements in place with 16 Indigenous communities for a 10 per cent equity stake.

Some environmentalists have suggested that as the world begins to move away from fossil fuels in the coming decades, the Trans Mountain pipeline could become a stranded asset and a liability to whoever owns it.

But Mason said Friday that access to revenue streams from today’s fossil fuel industry will give Indigenous communities the ability to invest in tomorrow’s energy innovations.

 "That corridor is a valuable corridor to move what will be the next generation of energy, whether it be in the form of ammonia or pure hydrogen. That corridor is very expensive real estate," Mason said. 

"As I’ve had conversations with chiefs, you want to own this now. Because as soon as that switch flips that we’re now moving hydrogen ... the cost to get in will be way too high."

Other groups — including a partnership formed by Western Indigenous Pipeline Group and its industry partner, Pembina Pipeline Corp. — have previously expressed interest in pursuing an Indigenous-led stake in the pipeline.

Mason said while the construction of the Trans Mountain expansion is "getting close to the last spike," the negotiation of a sale is extremely complex and will take a significant amount of time. 

The federal government itself has not yet announced any type of formal divestment process.

"As we get closer to summer, I think that’s going to be more where the serious discussions start," Mason said.

“This is one of the biggest transactions in Canadian history. I’d be very surprised if it could be closed within a year."

This report by The Canadian Press was first published March 17, 2023.

Army of lobbyists helped water down U.S. banking regulations

Brian Slodysko and Ken Sweet , The Associated Press

It seemed like a good idea at the time: Red-state Democrats facing grim reelection prospects would join forces with Republicans to slash bank regulations — demonstrating a willingness to work with President Donald Trump while bucking many in their party.

That unlikely coalition voted in 2018 to roll back portions of a far-reaching 2010 law intended to prevent a future financial crisis. But those changes are now being blamed for contributing to the recent collapse of Silicon Valley Bank and Signature Bank that prompted a federal rescue and has stoked anxiety about a broader banking contagion.

The rollback was leveraged with a lobbying campaign that cost tens of millions of dollars that drew an army of hundreds of lobbyists and it was seeded with ample campaign contributions.

The episode offers a fresh reminder of the power that bankers wield in Washington, where the industry spends prodigiously to fight regulation and often hires former members of Congress and their staff to make the case that they are not a source of risk to the economy

“The bottom line is that these banks would have faced a tougher supervisory framework under the original ... law, but Congress and the Trump regulators took an ax to it,” said Carter Dougherty, a spokesman for Americans for Financial Reform, a left-leaning financial sector watchdog group. “We can draw a direct line between the deregulation of the Trump period, driven by the bank lobby, and the chaos of the last few weeks.”

President Joe Biden has asked Congress for the authority to impose tougher penalties on failed banks. The Justice Department and the Securities and Exchange Commission have started investigations. And congressional Democrats are calling for new restrictions on financial institutions.

But so far there is no indication that another bipartisan coalition will form in Congress to put tougher regulations back in place, underscoring the banking industry's continued clout.

That influence was on full display when the banking lobby worked for two years to water down aspects of the 2010 Dodd-Frank law that had placed weighty regulations on banks designed to reduce consumer risk and force the institutions to adopt safer lending and investing practices.

Republicans had long looked to blunt the impact of Dodd-Frank. But rather than push for sweeping deregulation, Sen. Mike Crapo, an Idaho Republican who led the Senate banking committee, hoped a narrowed focus could draw enough support from moderate Democrats to clear the Senate’s 60-vote filibuster threshold.

Crapo broached the idea with Democratic Sens. Jon Tester of Montana, Joe Donnelly of Indiana and Heidi Heitkamp of North Dakota — all on the ballot in 2018 — as well as Mark Warner of Virginia. By the fall of that year, the bipartisan group met regularly, according to a copy of Tester’s office schedule posted to his Senate website.

A lobbying strategy also emerged, with companies and trade groups that specifically mention Crapo's legislation spending more than $400 million in 2017 and 2018, according to an Associated Press analysis of the public lobbying disclosures.

The bill was sold to the public as a form of regulatory relief for overburdened community banks, which serviced farmers and smaller businesses. Community bankers from across the U.S. flew in to Washington to meet repeatedly with lawmakers, including Tester, who had 32 meetings with Montana bank officials. Local bank leaders pushed members of their congressional delegation when they returned home.

But the measure also included provisions sought by midsize banks that drastically curtailed oversight once the Trump Fed finished writing new regulations necessitated by the bill’s passage.

Specifically, the legislation lifted the threshold for banks that faced a strict regimen of oversight, including mandatory financial stress testing.

That component, which effectively carved large midsize banks out of more stringent regulation, has come under new scrutiny in light of the failure of Silicon Valley Bank and Signature Bank, whose executives lobbied on behalf of the 2018 rollback.

“The lobbyists were everywhere. You couldn’t throw an elbow without running into one," Sen. Elizabeth Warren, a Massachusetts Democrat who vehemently opposed the bill, told reporters last week.

Campaign checks were written. Ads were cut. Mailers went out.

As a reward for their work, Heitkamp ($357,953), Tester ($302,770) and Donnelly ($265,349) became the top Senate recipients of money from the banking industry during the 2018 campaign season, according to OpenSecrets, a nonpartisan group tracking money in politics.

Democratic Senate leader Chuck Schumer freed members to vote for the bill, a move intended to bolster the standing of vulnerable moderate incumbents. But the move also bitterly divided the Democratic caucus, with Warren singling out the moderates as doing Wall Street's bidding.

In the hours before the bill passed the Senate with 17 Democratic votes, Heitkamp took to the chamber floor to inveigh against the “diatribe,” “hyperbole” and “overstatement” from opponents of the bill.

Tester, meanwhile, huddled with executives from Bank of America, Citigroup, Discover and Wells Fargo, who were there on behalf of the American Bankers Association, according to his publicly available office schedule.

The American Bankers Association, which helped lead the push, later paid $125,000 for an ad campaign thanking Tester for his role in the bill’s passage, records show.

Less than a month after the bill was passed out of the Senate, Tester met Greg Becker, the CEO for the now-collapsed Silicon Valley Bank, according to his schedule. Becker specifically lobbied Congress and the Federal Reserve to take a light regulatory approach with banks of his size. Lobbyists with the firm the Franklin Square Group, which had been retained by Silicon Valley Bank, donated $10,800 to Tester's campaign, record show.

Heitkamp was the only member of the group invited to the bill signing ceremony, beaming alongside Trump. Later, Americans for Prosperity, the grassroots conservative group funded by the billionaire industrialist Koch brothers, ran an online ad commending Heitkamp for taking a stand against her party.

In an interview, Heitkamp pushed back against suggestions that the legislation was directly responsible for the collapse of Silicon Valley Bank. She acknowledged, however, that there was an open question about whether new rules put in place by the Fed after the measure was signed into law could have played a role.

“I’m willing to look at the argument that this had something to do with it,” Heitkamp said, adding: “I think you will find that (the Fed) was engaged in some level of some supervision. Why that didn’t work? That’s the question that needs to be resolved.”

In a statement issued last week, Tester did not directly address his role in the legislation, but he pledged to "take on anyone in Washington to ensure that the executives at these banks and regulators are held accountable.”

Cam Fine, who led the Independent Community Bankers of America trade group during the legislative push, said the overall the bill was a good piece of legislation that offered much needed relief to struggling community banks.

But like any major piece of legislation that moves through Congress, final passage hinged on support from a broad coalition of interests — including those of Wall Street and midsize banks.

“Was it a perfect piece of legislation? No. But there’s an old saying in Washington: You can’t let the perfect be the enemy of the good,” said Fine.

Many of the moderate Democrats who supported the measure did not fare as well.

Of the core group who wrote the bill, only Tester won reelection. Others from red states who supported it, including Claire McCaskill of Missouri and Bill Nelson of Florida, lost.

Tester will be on the ballot again in 2024. Last week he was in Silicon Valley for a fundraiser.

One of the event's sponsors was a partner at a law firm for Silicon Valley Bank.

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Sweet reported from New York. Associated Press writer Kevin Freking contributed to this report.