New Report: Big Oil’s Money Pit to Reap Stimulus Billions
WASHINGTON – The Federal Reserve just announced $750 billion in corporate debt-buying as part of funding made available through the stimulus. Big Oil companies stand to reap yet another billion dollar bailout. As small businesses across America struggle and unemployment skyrockets, a new analysis from Friends of the Earth documents the billions in taxpayer funded aid that Big Oil and its allies in Congress are trying to secure. Other recent analyses from Friends of the Earth shed more light on how oil, gas and fracking companies stand to benefit from the stimulus packages.
Top-lines from the new analysis include:
- ExxonMobil, Chevron and Conoco are together eligible for up to $19.4 billion in potential benefits, based on their credit ratings and outstanding long-term debt,
- There are 12 fracking-focused oil and gas companies that could potentially qualify for the new program. Together, they may be eligible for over $24.1 billion in potential benefits.
- Major fracking company Continental Resources, whose debt was recently downgraded to below investment grade by S&P, is potentially eligible for as much as $1.5 billion under new, weaker standards announced by the Federal Reserve.
- As BlackRock begins purchasing “high yield” exchange-traded funds (ETFs) to bolster corporate debt markets, energy companies (predominantly oil and gas) stand to benefit disproportionately as the largest single issuer of junk bonds, at 11% of the entire US market.
Lukas Ross, senior policy analyst with Friends of the Earth, issued the following statement in response:
Oil company bailouts are simply throwing good money after bad. Congress and the Democrats must stop this endless stream of handouts to an industry that is exploiting a public health crisis for financial gain. These potential payoffs to major campaign contributors are the least efficient way of re-starting the economy and will just serve to enrich oil executives. Oil companies are trying to punt the financial reckoning of their fracking debacle and Congress should not enable their addiction with public tax dollars.
Instead of pumping money into an irresponsible industry that plays shell games with its debt, Congress should focus on providing direct support to workers and communities on the frontlines of coronavirus. Oil company junk bonds are no place to invest in the future.