US fossil fuel companies are potentially in for a bumper bailout package under plans drawn up by the federal government.
Almost 100 fossil fuel companies could benefit from the coronavirus bond buyback programme being set up by the Federal Reserve, according to a new study. These companies include Chevron, Koch Industries, and ExxonMobil amongst others.
A further 150 utility companies also stand to gain from the programme. This includes coal-heavy companies such as Duke Energy and American Electric Power.
The scheme has an estimated value of $750bn (£605bn) in total. By September, thousands of companies will have benefitted from the scheme, although the amount that could go to utilities and fossil fuels is not yet known.
The study was conducted by Rainforest Action Network (RAN). Senior campaigner at RAN, Jason Disterhoft, said that strict conditions should be attached if public money is to be used to bail out companies.
“Our concern is that these recovery funds should be prioritising people and communities and they are going instead to big companies to pay down their debts,” said Disterhoft.
The RAN analysed fossil fuel companies based in the US to see whether they would qualify under the rules of the scheme. According to their analysis, a quarter of the top 40 fracking companies are eligible to apply for the scheme.
May companies are expected to apply for support through the scheme, although it is yet to be confirmed.
The fall in energy use as a result of the COVID-19 lockdown has had a severe impact on coal-fired power plants and utilities, whereas the dive in oil prices has caused chaos for oil companies.
“The recovery is a choice between propping up the fragile fossil fuel industry and building the resilient green economy we need. The list of who is eligible for the Fed’s massive bond purchase programmes, including struggling frackers, coal companies and supermajors, shows what’s at stake,” said Disterhoft.
“Recovery funds have to go to workers and environmental clean-up first, not bonuses or dividends, and companies should be required to stop expanding fossil fuels and phase out their fossil business – otherwise we’re just lighting public money on fire and locking in the coming climate crash into the bargain.”
An independent study carried out last week found that putting public funds into the same fossil-fuel based economy wouldn’t produce as high economic returns as investing in a green recovery.
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