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American fossil fuel companies have taken at least $ 50 million in taxpayer money that they probably won’t have to pay back, according to a review of coronavirus aid for struggling small businesses by investigative research group Documented and The Guardian.
A total of $ 28 million will go to three coal mining companies, all with ties to Trump officials, bolstering a declining U.S. industry and a fuel that scientists insist world leaders must steer clear of to avoid the worst of the climate crisis.
The other $ 22 million is paid to oil and gas equipment and service providers and other companies that work with drillers and coal miners.
Melinda Pierce, legislative director of the Sierra Club, said: “The federal money Congress appropriated should help small businesses and frontline workers struggling as a result of the pandemic, not the corporate polluters whose struggles are the result of failed business practices and existed long before Covid-19 entered the public lexicon. “
More than 40 Democratic lawmakers have He argued that fossil fuel companies should not receive assistance under the coronavirus aid package.
Some Democrats have also warned that forgivable loans from the Congressional Paycheck Protection Program could be a disaster of transparency.
Banks and credit institutions are distributing the money, so the government says it cannot track recipients in real time. The disclosed loans have been made public only through news reports and securities filings of publicly traded companies, although the Federal Reserve has promised to issue monthly reports.
So far, it is clear that the program is not working as intended. The funds are intended to help small businesses keep paying their employees and cover other recurring expenses during the economic downturn. But they have been exploited by large companies forced to return the money amid a public outcry, including the Los Angeles Lakers, Shake Shack and Ruth’s Chris Steak House.
Industry aid comes as the Trump administration is reportedly considering a broader bailout for oil and gas corporations, which were already under pressure before the coronavirus and have seen oil prices plummet due to a global price war and low demand for gasoline. The United States government could make loans to oil and gas companies, essentially making taxpayers investors in the industry.
The Federal Reserve also announced changes to its loan rules Thursday that could help indebted oil companies.
“The idea that oil workers are getting a paycheck is great,” said Jamie Henn, a spokesperson for the Stop the Money Pipeline campaign co-founded by environmental group 350.org. “The concern is that the money will go to the top and will not leak.”
The $ 50 million already paid to fossil fuel companies is a small fraction of the $ 2.1 billion Coronavirus Economic Aid, Relief and Security Act, known as the Care Act. But total industry assistance is likely to be much higher than can currently be counted and will continue to grow.
Environmental advocates and monitoring experts tracking the funds say it is impossible to count how much of the money will help fossil fuels, even as some companies provide services in multiple industries.
“These are all voluntary disclosures from companies,” said Jesse Coleman, principal investigator for Documentation. “No matter what, it will be an incomplete picture of what is happening.”
Coleman said that in many cases the fossil fuel companies receiving aid have made bad investments and “now they will come crawling with their hats in their hands and say: look what the coronavirus did to us.”
It is a bad financial proposition for the Fed and for taxpayers, and a bad situation for the planet.
Coronavirus aid recipients include Hallador Coal, an Indiana-based coal mine company that hired former Donald Trump chief of the environment Scott Pruitt as a lobbyist. The company’s former director of government relations now works in the energy department. Hallador is taking $ 10 million to finance two months of payroll and other expenses.
The coal mining company Rhino Resources, which was previously headed by the head of Trump’s Mine Safety and Health Administration, David Zatezalo, is receiving $ 10 million.
Coal firm Ramaco Resources, whose CEO, Randy Atkins, is on the energy department’s National Coal Council, is raising $ 8.4 million.
The United States’ coal industry has been in sharp decline, driven out of the market by cheap natural gas and environmental concerns. Trump campaigned for coal miners to return to work, and his agencies have unsuccessfully explored ways to rescue coal companies, which are seeing their lowest employment levels in modern history. The Trump administration has also terminated almost all environmental and climate protections that the fossil fuel industry has opposed.
Fossil fuel companies can also take advantage of the tax benefits of coronavirus legislation, including deferral of social security payments and Medicare taxes.
Missouri-based coal company Peabody Energy has said it will accelerate the collection of an alternative minimum tax refund of $ 24 million by 2020 and defer $ 18 million of taxes owed.
American taxpayers already subsidize the fossil fuel industry by about $ 20 billion a year, according to conservative estimates.
The Center for International Environmental Law has accused the oil, gas and plastics industries of “exploiting the crisis by aggressively pressing for massive bailouts and special privileges in a desperate attempt to revive an already declining oil and gas industry.”
The Institute for Economic and Financial Analysis for Energy argues that federal loans to the oil and gas sector would be “a total waste of money,” because they would not solve the industry’s underlying financial problems.
Lobbyists in the oil industry have lobbied for changes to be made to the Federal Reserve to allow companies with large amounts of debt to use their High Street Loan Program and borrow to repay existing loans.
In an April 15 letter to the Federal Reserve, the oil trading group of the Independent Petroleum Association of America requested the new provisions, saying that “oil and natural gas producers are not seeking a government donation; they are looking for a bridge to help survive this economic disruption. “
Environmental advocates say the measure would benefit disproportionately small and medium oil and gas companiessuch as Occidental Petroleum, which has liabilities of almost $ 80 billion on its balance sheet.
Graham Steele, who heads the corporate and societal initiative at the Stanford Graduate School of Business, called the situation “the classic disaster scene in which an opportunistic administration and industry are taking advantage of a crisis.”
“And by the way, these are industries that drive climate change. It is both a bad financial proposition for the Fed and for taxpayers and a bad situation for the planet. “
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