Government aid is sustaining the fossil fuel industry, which was already in dire financial straits before the coronavirus ground the economy to a halt.
President Donald Trump tweeted on April 21, 2020, that he had instructed the Energy Department and Treasury “to formulate a plan which will make funds available so that these very important companies and jobs will be secured long into the future.”
Soon after, the fossil fuel industry successfully lobbied for changes allowing more companies to access taxpayer-backed loans under a program run by the Federal Reserve. Trump’s Energy secretary said that Treasury Secretary Steven Mnuchin “worked very closely with the Federal Reserve” to make the money available to more players in the oil and gas sector.
The Fed, which must safeguard its independence to fulfill its mission, denied that the moves were aimed at a particular industry – yet these very changes had been urged by fossil fuel lobbyists in the weeks before the Fed’s announcement.
A number of fossil fuel companies had already benefited from government actions. Tax law changes in the coronavirus aid package allowed companies to claim immediate refunds for past-year losses. Some companies have been allowed to stop paying customary fees when they drill and mine on public land. The administration has also pushed to make the government a key buyer of excess oil flooding the market by modifying the mission of the Strategic Petroleum Reserve, which was designed to protect the nation from oil price spikes that could imperil national security.
BailoutWatch is tracking how these and other efforts are benefiting the fossil fuel industry to determine if they put taxpayer dollars at risk by providing support to failing businesses.