Ever since the federal government began its response to the economic crisis caused by the coronavirus pandemic (see full timeline), fossil fuel companies have been highly prioritized as recipients of emergency aid.
The White House and lawmakers from fossil fuel-producing states have explicitly advocated for fossil fuel companies to be able to access funds from the CARES Act passed at the end of March, as well as from loan programs through the Federal Reserve and the Treasury.
In early April, President Trump hosted oil executives at the White House while his administration has used COVID-19 as cover to push through a number of harmful rollbacks on environmental regulations.
In late April, the Federal Reserve announced details of significant changes to its Main Street Lending Program that will greatly help struggling oil and gas companies secure loans – a decision Energy Secretary Dan Brouillette confirmed was for the benefit of energy companies.
Many oil, gas, and coal companies were already in poor financial shape, carrying hundreds of billions in debt predating the coronavirus pandemic. Using federal aid to allow the fossil fuel industry to continue business as usual will only further the global climate crisis without addressing significant structural imbalances within the industry.
Moreover, given that many of the financial institutions that have been propping up the fossil fuel industry through investments, loans, and insurance are also in line to receive significant bailout money, these programs are poised to open a backdoor slush fund for banks. This is especially concerning given that one such institution, BlackRock, has been granted authority to manage some of the bailout funds provided by the Federal Reserve, which has made $2.3 trillion available for loans so far as part of the response to coronavirus, a figure that experts currently estimate could rise to as high as $4.5 trillion. Little oversight of how the money is being allocated has been written into the programs, and Trump has sought to undercut what few oversight levers do exist.
But not even industry groups are on board: The American Petroleum Institute opposes the measure, telling CNN a bailout runs against free-market principles and comes with too many political risks.
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