News Roundups

Bailout fuels Big Oil bender, PPP forgiveness on deck, and more

Daily news headlines about the stimulus and recovery from October 1, 2020.

Critics See Bailout in Federal Purchase of Oil Companies’ Debt

The U.S. government has used emergency pandemic aid to purchase more than $355 million in bonds issued by companies in the battered oil and gas industry, according to a report being released Wednesday by critics who say the investments amount to a bailout.

The Federal Reserve began buying corporate debt to shore up the reeling economy in March. Some of the acquisitions benefited drillers, integrated and independent refiners, pipelines, and oil field services companies, according to the report, released by the advocacy group Public Citizen along with the environmental groups Friends of the Earth and Bailout Watch.

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Coal giant moves away from fueling power plants

In May, America's second-largest coal company announced it was dropping "coal" from its name. Now, it might drop coal that's burned in power plants altogether.

The announcement from Arch Resources Inc. yesterday followed a federal judge's decision to block its joint venture with Peabody Energy Corp. over antitrust concerns. The order prevents the two mining giants from combining their operations in the Powder River Basin, America's most productive coal fields.

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Treasury says it could start forgiving PPP loans this week

The Treasury Department expects as soon as late this week to begin approving and paying out the forgiveness requests of Paycheck Protection Program (PPP) applicants, the agency said Tuesday, according to The Wall Street Journal.

Meanwhile, 10 trade groups — including the American Bankers Association (ABA), the Credit Union National Association, the Independent Community Bankers of America and the Bank Policy Institute — wrote a letter urging Senate and House leaders to pass a measure reauthorizing PPP funding. The program closed to new applications Aug. 8, leaving $130 billion unallocated.

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Oil bankruptcies could shift clean-up bill to US taxpayers

US taxpayers could be left footing a bill of tens or even hundreds of billions of dollars to clean up oil and gas wells across the country as a growing number of producers collapse into bankruptcy, according to a new report.

A tiny proportion of the costs of “plugging” America’s active wells are currently covered by insurance mechanisms, the report from the Carbon Tracker think-tank estimates. That means when companies go bust, the bill for doing so will often be left to the state authorities.

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OPINION: The Biggest Polluters Are Hiding in Plain Sight

It’s only when your car breaks down that you realize you’ve been sold a lemon.

That’s a lesson often applied in financial markets. When capital is flowing freely, investors aren’t likely to spend too long kicking the tires before deciding to put money down. When funding becomes more constrained, they’ll want to examine every detail of the log book before driving off.

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