How U.S. Fossil Fuel Companies Could Profit From The Covid-19 Stimulus Package

How U.S. Fossil Fuel Companies Could Profit From The Covid-19 Stimulus Package

On Wednesday, the U.S. Senate approved a $US2 ($3) trillion covid-19 stimulus package. It could spell disaster for the climate.

U.S. Democrats failed to win the inclusion of tax credits for renewable energy or rules forcing airlines cut their greenhouse gas emissions. And though Republicans’ proposal to bail out the oil industry by purchasing $US3 ($5) billion of oil for the Strategic Petroleum Reserve didn’t make it into the final bill, another part of the bill could still allow fossil fuel companies to secure massive payouts.

Buried in the 900-page bill is a provision that would establish a $US4.5 ($8) trillion corporate bailout fund, which will be overseen by Treasury Secretary Steve Mnuchin with very little oversight. Sure, a five-member oversight panel with appointees by House and Senate leaders will report to Congress every 30 days, but crucially, it won’t have the power to veto Mnuchin’s decisions.

“There’s not really anything stopping the oil industry from getting massive payouts,” Collin Rees, a campaigner with Oil Change International, told Gizmodo. “The guardrails are pretty weak.”

Even before the pandemic began, fossil fuel prices were plummeting. The spread of covid-19 has made their bad situation even worse. Bailing out failing fossil fuel companies is a terrible idea, but Mnuchin is likely to do it anyway. Just a week ago, he was advocating for a massive oil bailout.

“We know oil, gas, and coal CEOs are already lining up for handouts,” Greenpeace senior communications specialist Ryan Schleeter told Gizmodo in an email, citing a recent attempt by the National Mining Association and another by oil tycoon and Trump advisor Harold Hamm. “The task now is to keep enough pressure on Mnuchin and the eventual members of the oversight panel to ensure those funds are used in the best interests of workers, not executives.”

But the bill will make that an uphill battle. The bailout fund provision also allows any companies that received bailouts to lay off up to 10 per cent of their workers, without any stipulations afterward. In other words, while wealthy shareholders increase their profits, workers will likely get screwed.

So could the climate. Bailing out fossil fuel companies will allow them to keep spewing planet-warming greenhouse gas emissions into the atmosphere. And of course, oil and gas companies’ emissions don’t just cause global warming, they also create dangerous human rights abuses, like what went down at Standing Rock over the Dakota Access Pipeline.

“The fox has been left entirely in charge of the henhouse,” said Rees. “And there’s virtually no mechanism to stop the fossil fuel industry from elbowing its way to the front of the line.”