The Fed told reporters that the changes were not directed at oil and gas companies, or any one industry, but were intended to make the program accessible to more businesses in general. The central bank also said a lot of energy companies would still be excluded based on debt limits built into the program.

The Treasury Department, which is working with the central bank to design its emergency programs, similarly pushed back on the idea that these changes were designed specifically to help the energy industry.

Still, changes to the terms could benefit several heavily indebted small- to medium-size oil and gas companies, many of which were highly leveraged before fuel demand cratered at historic rates in response to social distancing measures shuttering the economy.

Those companies won’t qualify for a different Fed program designed for large, creditworthy companies, a fact that last week led Treasury Secretary Steven Mnuchin to muse publicly about creating a separate emergency facility that would be able to aid oil companies facing a more dire financial situation.

Energy Secretary Dan Brouillette on Tuesday told the North Dakota Petroleum Council that the Trump administration was weighing offering oil and gas companies “bridge loans” and new Fed measures.

Brouillette later praised the Fed’s announcement as an action to help those companies.

“Great news out of the Fed today in support of struggling U.S. energy companies,” he tweeted Thursday evening. “At the direction of President @realDonaldTrump, I will continue to work with Secretary @stevenmnuchin1 to provide other relief to the industry and fill our strategic reserves.”

In response to that statement, Senate Minority Leader Chuck Schumer blasted the administration for “rushing to bail out big oil companies after their CEOs donated millions to the Trump campaign, while so many Main Street businesses are still waiting to get help.”

Pandemic precautions are likely to depress U.S. oil production through the year, falling a projected 1.6 million barrels per day, according to investment research firm BCA Research.

Sen. Dan Sullivan (R-Alaska) told POLITICO that the changes were “clearly a reflection on what we’ve been advocating for” to help the energy industry.

“Whether it’s the president or Mnuchin or his team, there’s a clear recognition that this sector of the U.S. economy is not just important for Alaska or Oklahoma or North Dakota or Texas,” he said. “This was unequivocally the sector of the U.S. economy that drove us out of our last recession.”

Firms like Continental Resources, whose CEO Harold Hamm is an ally of President Donald Trump and last week reportedly invoked an “act of God” clause to skirt oil deliveries to a refiner; Occidental Petroleum, whose debt fell below investment grade in March; and Chesapeake Energy, which Reuters reported is preparing its own bankruptcy filing, could be eligible under the revised conditions, said Andrew Park, a financial policy analyst at Americans for Financial Reform.

Those revisions come after the Fed sought public comment on the initial design of the lending program, and the expansion was met broadly with praise from business groups.

“The changes will make the program accessible to more American businesses, and will help eligible lenders administer the program more effectively,” said Tom Quaadman, executive vice president of the U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness.

But they also come after a concerted push from some corners of the oil and gas industry, as well as several Republican lawmakers. The Independent Petroleum Association of America sent an April 15 letter to Fed Chair Jerome Powell asking for tweaks allowing companies to use the emergency loans to pay off existing debts. The smaller companies IPAA represents typically raise funds for new exploration with debt.

“It basically looks like the Fed acquiesced to pressure from the oil industry and some of its Republican champions,” said Moira Birss, climate and finance director with environmental group Amazon Watch.

Jennifer Pett, a spokesperson for IPAA, said the Fed’s move “sends a clear signal to IPAA members that the Administration is willing to address some of our recommendations for assuring that producers have access to the Main Street Lending Program, and that our industry is not excluded from participating.” She said the association is still reviewing the directive and asking its members to evaluate its impact.

Under the emergency program, the Fed will buy the majority of a four-year loan made by a bank to a business, and any losses for the government will be covered by Treasury. Thanks to the changes, companies with up to 15,000 employees or up to $5 billion in annual revenue can now qualify for those loans — up from 10,000 employees and $2.5 billion in revenue.

The employee cap is most beneficial to companies like Occidental, which has more than 14,000 on its payroll, and ConocoPhillips, which employed 10,400 people, according to its annual securities filing.

While not commenting directly on the program, ConocoPhillips spokesperson John Roper said in an email that the company is “in a pretty advantaged position compared to most of our industry peers” having ended the first quarter “with about $14 billion of liquidity, including $6 billion of available revolving credit facility.”

Sen. Kevin Cramer (R-N.D.) and other Republicans have pressed the Fed and Treasury to ensure the emergency lending programs remain accessible to companies too large for small business loans but not big enough to weather the pandemic without assistance. In a statement, Cramer said he was “encouraged” by the revisions to the Main Street program.

Already indebted companies can qualify for new bank loans of between $500,000 and $25 million under the program, as long as their debt will still be below six times their earnings, though banks will have to keep a bigger piece of those loans than for more financially safe companies. Under the same debt threshold, companies can also qualify for an expansion of an existing loan by up to $200 million.

They will also be able to use the funds to pay down existing debt, increasing the attractiveness of the Fed-backed loans, which are otherwise required to be paid off before all other debt.

But Graham Steele, a former staffer for Democrats on the Senate Banking Committee, said that could mean taxpayers won’t be repaid if oil and gas firms cannot find a path to solvency.

Lenders had already been frowning at slowing returns from such companies before the twin blows of the Saudi Arabia-Russia price war that created supply glut and the steep demand destruction caused by the coronavirus. Analysts said recent events accelerated a long-expected wave of bankruptcies and consolidation.

“This is effectively taxpayers coming in and letting companies pay out existing creditors who put a bad bet on an essentially dying industry,” said Steele, who is now director of the Corporations and Society Initiative at Stanford Graduate School of Business.

Ramamurti voiced a similar worry. “A lot of the changes … seem to move this from temporary liquidity for companies hurt by Covid to a bailout of companies that were already in bad shape pre-Covid,” he told POLITICO.

Banks will also have underwriting flexibility to determine a borrower’s earnings under an accounting measure known as EBITDA. Steele said “squishy, vague language” allowing “industry-specific” calculations for indebtedness would allow oil and gas companies to tiptoe around those restrictions.

Still, some in the oil and gas industry said tapping the program could signal a death knell for companies and pointed to a number of conditions that go along with the loans; businesses that take advantage of the Fed program will face restrictions on stock buybacks, dividend payments and executive compensation.

“Why would a company want to access those facilities? It’s really a lender of last resort, and there are so many strings attached to it and such a stigma. It could be harmful from a long-term investment perspective,” said an official from an oil and gas company who was not authorized to speak to the press.

Anthony Adragna contributed to this report.