Industry Also Received Nearly $95 Billion in Indirect Support Through Federal Bond-Buying Programs and Private Bond Sales, Bringing Benefit Tally to $110 Billion
WASHINGTON, D.C. – The fossil fuel industry has received up to $15.2 billion in direct federal relief through federal COVID-19 recovery programs since bailouts began in March 2020, a new report by BailoutWatch, Public Citizen and Friends of the Earth has found.
The report tallies the amount of money that has flowed to fossil fuel companies and related services since the beginning of the pandemic response.
All told, $110 billion in direct and indirect benefits, with half of the quantifiable direct and indirect benefits going to just 66 companies, including nearly $95 billion in indirect benefits.
- In its response to the pandemic since March 26th, the U.S. government provided between $10.4 billion and $15.2 billion in direct benefits to coal, oil, and gas companies, including:
- At least $5.5 billion via CARES Act tax law changes to 70 money-losing dirty energy companies, a number likely to grow;
- $582 million in direct, subsidized loans through the Federal Reserve’s Main Street Lending Program to 37 mid-sized fossil fuel and related companies; the program caters to them by design;
- $4.3 to $9.1 billion in forgivable loans to at least 25,931 companies through the Small Business Administration’s Paycheck Protection Program; and
- At least 229 oil and gas companies enjoyed waivers of fees normally paid to drill on public land, giveaways that cost the government a minimum of $4.5 million in lost revenue, likely far more.
- Five major fossil fuel companies received more than 10% of the $110 billion in direct benefits like tax refunds and indirect support in the form of bond issuances, even as their finances continued a years-long decline.
- More than 60 others double- or triple-dipped into government programs, collecting tax refunds and subsidized or forgivable loans while paying less money to drill on public lands thanks to pandemic-related giveaways.
- The Fed indirectly purchased $432.1 million in already-issued fossil fuel bonds through its Secondary Market Corporate Credit Facility.
- Investors responded by lending $93.5 billion to the struggling fossil fuel industry in newly-issued bonds in the months after the Fed stepped in.
To determine the scope of bailout benefits, the report research team calculated the direct benefits paid out through programs established under the CARES Act – the Paycheck Protection Program, the Main Street Lending Program, and tax-law changes benefiting the industry – and other industry-friendly policies, like fee reductions for drilling on public land.
The Fed’s purchases of fossil fuel bonds from investors meanwhile, generated nearly $100 billion in indirect benefits as private investors, reassured by the Fed’s actions, were suddenly more willing to buy fossil fuel bonds.
“When the pandemic hit last spring, Trump’s corporate cronies made sure the fossil fuel industry was able to squeeze whatever favors they could out of the resulting economic rescues,” said Alan Zibel, research director of Public Citizen’s Corporate Presidency Project and a co-author of the report. “The Biden administration and the next Congress will have a golden opportunity to ensure our efforts to rescue the economy no longer benefit the very companies most responsible for the devastation caused by climate change.”
“The fossil fuel industry took advantage of the pandemic to put their hands out for help escaping a financial mess of their own making, and their allies in the federal government rode to the rescue,” said Christopher Kuveke, BailoutWatch analyst and a co-author of the report. “By artificially delaying the industry’s inevitable decline at taxpayers’ expense, the government has made it that much harder to make the necessary transition to clean energy sources.”
“The Trump Administration has wasted billions of dollars keeping the fossil fuel industry alive,” said Lukas Ross, Program Manager at Friends of the Earth. “President-elect Biden must ensure that people, not polluters, benefit from COVID relief. It’s time to cut dirty energy’s lifeline.”
Read the full report here.