Washington, D.C. — Environmental groups expressed outrage on Wednesday evening at the news that the Trump Administration is moving forward with a bailout for oil and gas companies instead of prioritizing direct aid to American families and workers who have lost their jobs due to the coronavirus pandemic.
“Big Oil is looking to steal as big a piece of the stimulus as possible. While first responders work without hazard pay or PPE gear, polluters are looking for a lifeline from taxpayers for their failing industry,” said Lukas Ross, Friends of the Earth Senior Policy Analyst.
The Trump administration is considering a number of ways to drive taxpayer dollars to the oil and gas industry despite acknowledging that it is an unpopular move with the public at large as well as with a growing number of Members of Congress. According to Bloomberg the administration is “poised to announce bridge loans for ailing oil companies” after a briefing by Treasury Secretary Steven Mnuchin and Energy Secretary Dan Brouillette.
The details of the Big Oil Bailout are still unclear, but early reporting suggests it could come in the form of bridge loans and emergency lending authority through the U.S. Federal Reserve. In addition, the Treasury is considering ‘alternative’ structures in coordination with banks to ensure that companies with poor credit ratings are able to access taxpayer dollars.
While Secretary Mnuchin is at pains to describe these loans, handouts, and support as anything but a bailout–“We will consider, again, loans to companies in a proper scenario with strategic importance, but no bail outs,” he said in an interview earlier this week–a bailout is exactly what the administration is preparing.
“This is nothing more than a greedy grab of the people’s bailout by some of the wealthiest corporations in the world,” said Tamara Toles O’Laughlin, North America Director of 350.org. “Big Oil is trying to protect profits for money hungry executives by siphoning dollars desperately needed by small and medium-sized businesses.”
There are numerous reasons why Big Oil doesn’t deserve a bailout:
The Trump Administration still hasn’t delivered for American families: Nearly 25 million Americans are out of work. Over 13.9 million of them have been unable to apply for unemployment benefits. Millions haven’t yet received the $1,200 payment promised by the federal government, a paltry sum compared with the economic pain underway. The administration needs to spend more time helping people and less time prioritizing the needs of oil company CEOs.
Oil companies are in a crisis of their own making: Oil and gas companies entered the coronavirus crisis overleveraged and saddled with massive debts. The industry’s profitability and share of the economy had already tanked. Between 2014 and 2016, oil and gas companies laid off 195,000 workers because of overproduction and cheap oil prices.
Giving bailout money to oil companies won’t help stimulate the economy or protect jobs: The oversupply of oil and gas means that there is no way for oil companies to help stimulate the economy or create more jobs: they’re already paying people to get rid of their product. Bailout money will just be wasted on pre-existing debts and won’t actually get to workers in need. A recent report by the Center for International Environmental Law, showed that even before the present crisis, oil, gas and plastics companies showed clear signs of systemic weakness, including long-term underperformance on stock markets, massive accumulations of corporate debt, and rapidly slowing growth.
Money should go directly to workers, not line the pockets of CEOs or investors: The best way to support workers in the oil and gas industry is to give them the money directly, not give it to the companies and hope that it “trickles down.” Fossil fuel industry workers need a real plan to support them during this crisis and provide a just transition to a clean energy future. Many oil and gas companies have their quarterly earnings calls coming up and will be announcing CEO compensations and stock dividends: any company that’s giving CEOs a raise and rewarding wealthy shareholders certainly doesn’t deserve public support.
With a Big Oil Bailout, the public gets all the pain and none of the gain: The CARES act has no requirements on companies to preserve jobs or limit executive pay, let alone deal with environmental or climate impacts. It also explicitly limits the government’s ability to assert voting rights in company matters making them a silent partner. A “no strings attached” bailout to the oil and gas sector would leave the public with all the risk and no reward in the form of commitments to limit emissions or wind down the industry.
The oil and gas industry is attempting to profit off the coronavirus crisis, endangering public health and the environment: The Trump Administration has already provided dozens of handouts to the oil and gas industry by lifting pollution regulations and other public health protections. The industry has tried to take advantage of the crisis to ram through dangerous new projects like the Keystone XL pipeline.
Coronavirus profiteers don’t deserve government support.
The oil and gas sector already gets massive government handouts in the form of subsidies: The US government already subsidizes the oil and gas sector to the tune of around $20 billion a year. That doesn’t include all the costs to our environment and public health borne by the public. These subsidies have been going on for over a century. The industry doesn’t deserve more.
A bailout for Big Oil only worsens the ongoing crisis of climate change: The climate crisis is another massive structural threat to the economy that could wipe out trillions in value. A recent study found that climate disruption could cost the American economy up to 10.5% of GDP by the year 2100. The response to COVID-19 needs to make our economy more resilient, not less. In fact, climate shocks could hit even as we’re still dealing with COVID-19.
Environmental groups are pledging to hold elected officials accountable for their positions on the Big Oil Bailout and their failure to prioritize the needs of their own constituents.
“The oil industry and its financiers have long subordinated protecting the climate and respecting indigenous peoples to their desire for short-term profit. Now they want a bailout when their badly-managed finances are collapsing. This is not the time to bail out a failing and harmful industry; it is the time to take care of those most impacted by the Covid-19 pandemic and make our economic and health systems more resilient to the coming climate crisis,” said Moira Birss, Climate and Finance Director at Amazon Watch.
According to a recent poll by the Yale Program on Climate Change Communication, Climate Nexus and the George Mason University Center for Climate Change Communication, two-thirds of Americans (67%) support providing financial assistance to renewable energy companies. By contrast, fewer than half support bailing out oil and gas companies (49%) or coal companies (44%).
“The fossil fuel industry wants us to believe its financial woes are just the result of COVID-19, but that’s a lie — these problems have been mounting for years as oil companies and banks made ever-riskier bets on extraction projects hurting communities and wrecking the climate,” said Collin Rees, Senior Campaigner at Oil Change International. “The only special treatment the Fed or any other bank should give the oil and gas industry is an automatic hard pass.”
“The federal government bailing out the industries destroying our only home, the only home of generations yet to come, is unconscionable,” said Tara Houska, founder of Giniw Collective. “Mother Nature has reminded us of our place in creation, we should listen.”