At a time of unprecedented environmental disaster and record-breaking rates unemployment and financial distress, the Trump closes his tenure as president by formally withdrawing from the Paris Agreement and presiding over a historic bailout of fossil fuel industry.
This report, produced in collaboration by representatives of Public Citizen, Bailout Watch, and Friends of the Earth, documents and critiques this recent bailout of the fossil fuel industries, undertaken in response to the pandemic. According to the report, the federal government under Trump has administered upwards of $15 billion dollars of direct benefits to fossil fuel companies since March 26th of 2020. These include at least $5.5 billion in tax benefits, $582 million in direct subsidized loans, $4.3-$9.1 billion in forgivable loans, and $4.5 million in waived drilling fees. What is more, over half of these loans, subsidies, and tax benefits went to just 66 of the largest fossil fuel companies in the U.S.
Apologists might argue that this spending will contribute to the U.S.'s post-pandemic recovery, spurring the development of local high paying jobs that the industry in known for. However, according to these analysts, that will not be the case. The majority of businesses receiving the bailout were already failing before the pandemic struck and thus the bailout will "do little to help workers or stimulate the economy because the companies receiving them are already financially squeezed, with little leeway to invest in hiring or infrastructure." The authors conclude that, despite the vast spending, the bailout will not revive the fossil fuel industry so much as delay the vitally necessary transition to renewable energy.
The bailout marks a continued and persistent failure in the U.S. to recognize the important role that its financial institutions will need to play in combating climate change. And through this failure, "the Fed has exacerbated the already dire threat of climate change, prolonging oil and gas companies’ ability to borrow money at lower rates than investors were willing to offer before the pandemic." On the flip side, however, other central banks have started to take the hint and, at the very least, they have begun to incorporate the financial risks of climate catastrophes into their investment planning. Even Jerome Powell, Chair of the Federal Reserve, declared climate change to be one of the material risks to be factored into their oversight of the financial system.
That may be a meager start but hardly marks a rupture in the government's energopolitical position. Indeed, with some states looking at upwards of $170 million in overdue utility bills, perhaps it is time for a more radical shift in alliances from bailing out a failing fossil fuel industry to ensuring the energy rights and well-being of the country's population.
Wagner, Dan L., Christopher Kuveke, Alan Zibel, and Lukas Ross. 2020. “BAILED OUT & PROPPED UP: U.S. Fossil Fuel Pandemic Bailouts Climb Toward $15 Billion.” Public Citizen.
Anonymous, "BAILED OUT & PROPPED UP: U.S. Fossil Fuel Pandemic Bailouts Climb Toward $15 Billion", contributed by James Adams, The Energy Rights Project, Platform for Experimental Collaborative Ethnography, last modified 7 December 2020, accessed 16 August 2022. https://energyrights.info/content/bailed-out-propped-us-fossil-fuel-pandemic-bailouts-climb-toward-15-billion