Polluters winning big in recovery efforts, Rep. Waters questions support for fossil fuels, and other news from around the web

While the world has been preoccupied by the Covid-19 pandemic, polluting industries have been pushing to turn the crisis to their advantage, lobbying governments — often successfully — for lucrative favors like bailout funds and the easing of costly regulations.

Industries such as oil and gas, coal, aviation, and auto-manufacturing describe the giveaways as necessary to ease the pandemic’s economic pain, but experts say the changes often align with companies’ long-standing agendas of weakening existing environmental rules and taxes, and opposing new ones. And, collectively, the moves threaten to create a dirty, high-carbon legacy that long outlasts the current crisis.

Rep. Maxine Waters, chair of the House Committee on Financial Services, sent a letter to Energy Secretary Dan Brouillette addressing Brouillette’s assertion that the Trump Administration is working with the Federal Reserve to bail out the oil and gas sector, which contradicts assurances made to the Chairwoman by Treasury Secretary Mnuchin and Federal Reserve Chair Powell.

Even as it drilled in some of the nation’s richest oil and gas basins, Oasis Petroleum came up dry on the bottom line, failing for five straight years to make enough money to cover its annual borrowing costs.

Oasis is what economists call a “zombie company” -- largely abandoned by investors and able to stay in business only by tapping banks or bond investors for more credit. The Federal Reserve’s efforts to fight the impact of the coronavirus upon the economy may be inadvertently making it possible for a growing number of companies to remain in this twilight state.

Several oil and gas service businesses in Louisiana have filed for bankruptcy protection in recent weeks amid an economic downturn spurred by the coronavirus pandemic and low crude oil prices. 

Two businesses near Lafayette, one in Houma and another in Kenner filed for bankruptcy, all of which appear to be oil and gas services companies. Dozens more Louisiana businesses are owed money by the companies filing for bankruptcy, records show. 

The Trump administration has allowed struggling oil and gas company Chesapeake Energy Corp to suspend production from more than 100 federal drilling leases without losing ownership of the assets since the outbreak of the coronavirus, according to a federal database.

The assistance for the cash-strapped shale pioneer, which is widely expected here to become the biggest U.S. oil and gas company to go bankrupt since the health crisis hit the global economy, accounts for nearly a third of the lease suspensions granted by the U.S. government in the last two months.

Companies typically are required to forfeit their leases if they stop working on them.

Treasury Secretary Steven Mnuchin defended his department’s decision to only release a partial list of the Paycheck Protection Program’s loan recipients, but said Congress could obtain additional information as part of its oversight probes.

Despite the high price tag of the program, the administration has yet to release any data about what companies have received the loans. This lack of transparency has raised the ire of watchdogs and lawmakers, particularly since the data that has been available has painted a picture that indicates the program has disproportionately disadvantaged minority and female-owned businesses. It also marks a break with precedent; other SBA-subsidized loan programs have released data for nearly thirty years.

Both crude oil and overall fossil fuel demand may have permanently peaked in 2019 if a slower economic recovery from the coronavirus pandemic becomes reality, hastening the arrival of peak oil demand by more than a decade, according to a new report from the Boston Consulting Group.

The pandemic rapidly cratered global oil demand by more than 20% from a 2019 high of more than 100 million b/d, and a combination of growing renewable energy supplies and potentially permanent changes to the way many people telecommute and work from home could ensure that worldwide consumption never again hits such highs.

Once the current Covid-19 crisis has been contained, the focus of governments everywhere will inevitably shift to improving their economic health. Funding alone will not be enough to ensure that we are building a sustainable system.

Instead, we must pay close consideration to the long-term consequences of short-term stimulus measures and focus on projects that not only grow the economy, but that also anticipate the impact of future risks, particularly climate change.