Fixing the Fix: How to Stop a Fossil Fuel Bailout
Learn more about NRDC’S response to COVID-19.
Senator Jeff Merkley (D-OR) and Representative Nanette Barragán (D-CA) introduced legislation today—the Resources for Workforce Investments, not Drilling Act (ReWIND)—that would limit access of fossil fuel companies to federal bailouts that respond to the COVID-19 pandemic.
As the pandemic stretches into another month and the world considers ways to safely resume some version of public life, Congress is focusing its energy on how best to assist in recovery. While nearly every economic sector has experienced some sort of negative impact, the Trump administration has been floating one idea after another for how to rescue the fossil fuel industry—an industry whose irresponsible financial behavior was causing economic woes long before COVID-19 appeared.
As these unnecessary and inappropriate proposals crop up, the industry itself is also maneuvering to gain access to stimulus grants and loans. Its latest coup appears to have been convincing the Federal Reserve to change the rules of its massive “Main Street” lending program. The changes could allow fossil fuel companies with terrible credit, that have been unwilling to use loaned funds to provide pay and benefits to their workforces, to still receive funds even if they plan to simply pay off past debt. Further, it’s taking advantage of the global crisis and the resulting reductions in capacity for oversight by the Department of the Interior and citizen groups to lease our public lands at rock bottom prices.
But even as a struggling industry—that also happens to be fueling the growing climate catastrophe—reaches for bailouts, there are ways to protect taxpayers. Senator Merkley’s and Representative Barragán’s bills halt the current public land giveaway and make critical changes to recently passed stimulus bills to address some loopholes that the fossil fuel industry is exploiting.
Specifically, the Merkley and Barragan bills:
- Suspend federal lease sales for oil, gas, and coal production until the end of COVID-19 national emergency and block recipients of CARES act loans from leasing federal lands until those loans are repaid;
- Place new limits on the size of the Strategic Petroleum Reserve (SPR) and prohibit storage by producers within the SPR;
- Repeal royalty relief provisions contained in various laws and limit authority of the Department of the Interior to reduce royalties for offshore producers;
- Extend public comment periods and suspend rulemakings related to oil and gas until after the end of the national emergency;
- Prohibit fossil fuel companies from accessing “eligible business” loans and other aid set aside for companies designated as “critical to maintaining national security”;
- Head off assistance to fossil fuel companies through the Defense Production Act; and
- Prevent banks engaged in CARES Act programs from making loan guarantees to, or acquiring, fossil fuel companies;
NRDC supports these important bills and the mechanisms they introduce to ensure government aid is dedicated to workers, leasing safeguards are not waived, and taxpayer dollars are not used to prop up fossil fuel industry players who were struggling long before COVID-19. As we rebuild the American economy following this unprecedented disruption, it is high time we stop investing in dirty fuels, rapidly wean ourselves off them, and instead invest in a cleaner, just, and equitable society powered by the technologies and workforces that can lead this country and the world to a healthier and climate safe future.