Politics and Protest Uncategorized

Fossil Fuel bailout? Why the Coronavirus is a crossroads for climate action

As the United States becomes the epicenter of pandemic brought on by the novel Coronavirus, or COVID-19, lawmakers have already begun a fossil fuel bailout — a move that could set back efforts to reign in corporate emissions. The U.S. Congress recently passed the CARES Act, a $2.2 Trillion stimulus bill to boost businesses that have been suffering the worst economic consequences of the pandemic and give $1200 to every American making less than $75,000 per year. Critics have pointed out that low-income families may not be able to access this money as easily as middle-class Americans. Shortly after signing the legislation, President Donald Trump announced that the White House would not comply with several congressional oversight provisions for distributing the CARES Act funds.

On Tuesday, April 7, Trump fired the acting Inspector General, Glenn Fine, who had been assigned to lead the Pandemic Response Accountability Committee to ensure public accountability and oversight of the $2.2 trillion CARES Act, according to the Associated Press. The latest move fits a larger pattern by the White House of sidelining government accountability watchdogs including others tasked with overseeing CARES Act implementation.

With the inspectors out of the way, the U.S. Treasury Secretary, a former Goldman Sachs executive and hedge fund manager, Steven Mnuchin will hold unprecedented power over who receives most of the stimulus funding. On Tuesday, Mnuchin urged Congress to fast-track an additional $250 billion for the small-business relief program in the CARES Act. 

In response to the lack of public accountability over the CARES Act, the Center for Biological Diversity filed a Freedom of Information Act request for the applications of fossil fuel and mining companies to be made public:

“Disclosure of the requested records will significantly enhance the public’s understanding of the potential financial assistance fossil fuels and mining companies will receive coupled with the lack of Congressional oversight, as compared to the level of public understanding that exists prior to the disclosure.”

The connections between the COVID-19 pandemic and the climate crisis go beyond the government response. Branch Out reported Friday how deforestation and air pollution make pandemics like COVID-19 more likely to occur and more severe. Although stimulus is necessary to support suffering workers and families, climate activists worry a fossil fuel bailout will boost pollution while bankrupting the planet.

Although the stimulus bill did not include $3 billion for big oil, an idea that had previously been floated, it did give $32 billion to the airline industry without any environmental standards attached, according to Salon. With limited oversight and environmental protection, however, the fossil fuel industry could cling to life despite pollution putting the world on the brink of climate collapse

The truth is, oil and gas companies were going bankrupt well before the COVID-19 pandemic rattled the industry further. Oilprice.com reported that 50 oil and gas companies filed for bankruptcy in the first three quarters of 2019 because they racked up multi-billion-dollar debts to ramp up production only to see the price of oil sputter.

President Donald Trump met Friday, April 3, with top executives from U.S. oil companies, after tweeting that he had a plan to raise the price of oil significantly by negotiating an end to a price war between Russia and Saudia Arabia. At this point, the U.S. oil and gas industry desperately needs higher prices to survive, but U.S. consumers, including at least 10 million who are newly unemployed, will pay more at the pump. 

Russia and Saudi Arabia have been engaged in a price war that resulted in both countries ramping up production, forcing prices down. The move has devastated shale producers in the U.S., where the cost of production is much higher than in Saudi Arabia. Now with the pandemic, there is almost no demand for oil, so the price shows no sign of rising without significant cuts in production.

MSN recently reported that in West Texas, the epicenter of the most recent U.S. production boom, the market is experiencing the largest oversupply of oil and gas ever recorded. Nationwide, the industry response is still playing out, but insiders speculate that drilling companies could shut off up to 65% of their rigs which will mean many thousands more jobs lost.

Another result of oversupply is increased flaring, a process where the excess gas that cannot easily be stored and sold is burned off at the production site. In a recent episode of the Drilled podcast, Sharon Wilson, a senior field investigator with Earthworks, revealed that recently the flares have not even been lit but the industry has still released unknown amounts of “methane and volatile organic compounds blasting from everywhere.”

The Earthworks investigation comes as Texas’ republican Governor Greg Abbott announced that due to the COVID-19 pandemic, oil and gas producers could apply to have any environmental, health and safety regulations waived. Less than two weeks later, the Environmental Protection Agency, or EPA, instituted a similar policy that indefinitely suspended enforcement of laws that protect against air and water pollution nationwide.

Across the northern border, in Canada, the government has moved to bail out oil and gas with direct financial support from the government. While the fate of the CARES Act money remains uncertain, the fossil fuel bailout in the United States has already started because the companies are being bailed out of environmental safeguards. 

Over the weekend, TC Energy began construction on the border crossing Canada and the state of Montana to build the highly controversial Keystone XL Pipeline. In addition to concerns about the environmental impact and tribal land rights, local community members are worried that construction camps,  some of which could eventually include more than 1000 workers, will serve as a breeding ground for COVID-19, according to the Washington Post

As the Climate Crisis and the Coronavirus escalate, 2020 is proving to be a major crossroads for both fossil fuels and climate action. As politicians offer platitudes about public health while increasing pollution, a people’s movement is growing despite Social Distancing. Across the country, including the southern United States where most domestic oil and gas production takes place, support has grown for Green Stimulus such as the Green New Deal or the Red Deal to provide the economic relief that individuals and families need while slashing emissions from fossil fuels and prioritizing the needs of communities most negatively impacted by the fossil fuel industry. 

 

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