A DELUGE OF BENEFITS

 
The fossil fuel industry received between $10.4 billion and $15.2 billion in direct economic relief from federal efforts under President Donald Trump.

During a year of massive economic losses caused by climate change-driven wildfires and hurricanes, the U.S. government has sent billions in pandemic-related economic aid to the fossil fuel companies most responsible for catastrophic climate damage.

An analysis by BailoutWatch, Public Citizen, and Friends of the Earth reveals the fossil fuel industry received between $10.4 billion and $15.2 billion in direct economic relief from federal efforts under President Donald Trump to sustain the economy through the pandemic.

These direct benefits were magnified by indirect lifelines, most notably the implied seal of approval conferred on some companies’ debt when the Federal Reserve bought $432 million in oil and gas bonds from private investors on the secondary market. The Fed earlier signaled its support for the broader bond market, including junk-rated debt, by buying Exchange-Traded Funds that included $735.4 million of fossil fuel bonds.

By demonstrating its willingness to take on fossil fuel debt — and risky debt from any part of the economy — the Fed drew private investors back into a shaky market. This fueled a lending boom of more than $93 billion in new bond issuances by oil and gas companies since the Fed intervened in March — the fastest rate of energy bond issuance since at least 2010.

The Fed’s bond purchases, along with the new issuances they spurred, amounted to indirect benefits totaling $94.7 billion. Together with direct benefits worth up to $15.2 billion, likely more, the 2020 fossil fuel bailouts add up to $110 billion.

triangle More than 26,000 coal, oil, and gas companies benefited directly from government stimulus efforts.

Pandemic-related assistance for the fossil fuel industry has come from numerous government entities, including the Fed, Treasury Department, Interior Department and Congress. Oil and gas companies have benefited from diverse means of support, including direct loans, tax cuts, and waived fees for drilling on public property. These companies benefited disproportionately from tax refunds and forgivable loans, despite, or even because of their weak financial footing going into the pandemic.

More than 26,000 coal, oil, and gas companies benefited directly from government stimulus efforts. The bulk of these received forgivable loans from the Small Business Administration’s Paycheck Protection Program, which dispersed up to $669 billion to all types of companies in hopes they would keep workers on payroll.

Five major fossil fuel companies enjoyed the biggest cumulative government benefits, banking 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.

Viewed together, these benefits amount to a multi-pronged government bailout for the fossil fuel industry. By directing aid to companies whose problems long predated the pandemic, the government has artificially prolonged the industry’s decline and postponed the coming transition to clean energy sources.

Direct & Indirect Benefits to Fossil Fuels Bailed Out & Propped Up

EARNING A SPOT IN THE HALL OF SHAME

DiamondBack Energy Bailed Out Fossil Fuel Stimulus Dollars

As Diamondback’s share price tumbled 65%, the company pocketed a $179 million tax refund bailout

  • Doubled its dividend payout to shareholders

  • Gave CEO Travis Stice a 26% bump in his 2019 base salary, boosting his total compensation to $16 million

  • Cut capital investment for 2020 by up to 35%

  • Spun off its Rattler Midstream division as a publicly-traded company last year, raising $720 million while maintaining a controlling stake in the pipeline operator.

eog resources Bailed Out Propped Up Fossil Fuels BailoutWatchCEO William Thomas was paid $12.7 million in compensation last year, including perks worth $367,000 

  • Longtime director H. Leighton Steward (retired in 2017) was a prominent climate skeptic, running two groups — Plants Need CO2 and CO2 Is Green — that claimed carbon emissions have “tremendous benefits” for plants, animals, “and the general health of humanity.”

  • In 2014, the company agreed to pay $486,000 to settle charges that it illegally polluted on the Fort Berthold Indian reservation by drilling more than 100 wells without first getting permits.

Marathon Petroleum Bailed Out Propped Out Fossil Fuels BailoutWatchTook nearly a half-billion dollars in local, state & federal subsidies since 2004 — before COVID bailouts began

  • Notified more than 2,000 workers that they had lost their jobs on Sept. 29 — just two months after announcing a $1.2 billion tax bailout.

  • Spent $2.5 million lobbying this year to date, including for more tax cuts for money-losing companies.

  • Employees gave $1.9 million to political candidates through Marathon’s political campaign committee in the previous and current election cycle, of which 92% went to Republicans. 

phillips66

Accused of repeatedly violating pollution laws at its Southern California refineries, increasing cancer and health risks to surrounding minority communities

  • Paid $632 million to settle 176 charges related to illegal pollution since 2000

  • Spent $2.5 million lobbying this year to date, including for more tax cuts for money-losing companies

  • CEO Greg Garland joined other energy executives at an early April meeting with President Trump, Interior Secretary David Bernhardt, and Energy Secretary Dan Brouillette to push for federal assistance

valero

Took $922 million in local, state, and federal subsidies since 2000 — long before the pandemic began

  • Has enjoyed close ties to the Trump administration since donating $100,000 to the president’s inaugural committee

  • CEO Joseph Gorder (2019 compensation: $28 million) was appointed to Trump’s “Opening Our Country Council” in April

  • Spent $1.35 million lobbying this year to date, including for more tax cuts for money-losing companies

THIS analysis by BailoutWatch, Public Citizen, and Friends of the Earth reveals the fossil fuel industry received between $10.4 billion and $15.2 billion in direct economic relief from federal efforts under President Donald Trump to sustain the economy through the pandemic.

DOWNLOAD REPORT