The House is expected Friday to vote on a proposed fifth stimulus package, a Democratic bill totalling $3 trillion. It includes aid to state and local governments needed to help pay for health care, police, fire and sanitation. It also includes more $1200 direct payments to families. Senate Republicans have said it will not pass. Natalie Mebane, associate policy director of the activist environmental group 350 Action, praised the bill as a good start, but cautioned,
“...the bill does not go far enough to protect against bailouts of the oil and gas industry. We know it is possible for House leadership to stand with the millions impacted by COVID-19 without providing lifelines and loopholes for fossil fuel billionaires to make a profit. To make the relief package air tight, we urge Pelosi and the House to incorporate the ReWIND Act…”
Rep. Nanette Barragán (D-CA) is one of five Democrats who last week introduced the Resources for Work-force Investments, Not Drilling (ReWIND) Act, designed to counteract the Trump administration’s pro-fossil fuel actions. She responded to The Young Turks’ story exposing a private telemeeting on a possible federal bailout for the fossil fuel industry.
That meeting occurred on April 22 between a top Washington lobbying firm, Akin Gump, and the giant Morgan Stanley investment firm. One key suggestion by oil lobbyists was to offer renewable-energy tax incentives in exchange for an oil bailout such as buying millions of barrels of oil to fill the US Strategic Petroleum Reserve (SPR). In a statement, Barragán expressed strong opposition to this quid pro quo.
“It would be unconscionable to bail out big oil and gas corporations with money intended to help families, workers and small businesses survive this global pandemic. Period. This isn’t about horse trading. It’s about helping people struggling to make it through the COVID-19 public health crisis – not to make it easier for fossil fuel companies to drive us closer to climate catastrophe.”
The ReWIND Act was co-sponsored by Barragán and 38 other Democratic members of Congress. In the unlikely event that it passes the Senate and President Trump signs the bill into law, it would limit the secretary of the interior from reducing royalties that oil and gas companies have to pay for leasing federal land or water for oil and gas exploration or extraction; prevent any stimulus CARES Act money from being doled out to fossil fuel companies; set up a moratorium on oil, gas, and coal leases; stop modifications of environmental regulations; and extend public-comment periods on some EPA regulations.
Thanu Yakupitiyage, a representative of 350 Action, explained that the ReWIND Act focuses opposition to the Trump administration’s pro-fossil-fuel agenda.
"The ReWind Act is a statement about the need to support people over polluters. It is a strong statement to ensure that corporate oil and gas are not bailed out. In introducing this legislation, Representative Barragán and Senator Merkley are drawing attention to the kinds of checks and balances needed to make the stimulus packages justice and put people first. The Act offers a rallying point for the type of legislation we need to ensure that corporate giveaways don't continue to wreck our communities and the planet."
One argument against bailing out oil and gas may be that the industry is set to recover on its own. After Saudi Arabia, several other OPEC nations, and U.S. oil companies agreed to reduce production even more, the price of a WTI barrel of oil rose about five percent on Tuesday to $24.14. Bloomberg News, quoting Morgan Stanley analysts, declared that the worst is over for the oil industry. While a return will be slow, Morgan Stanley believes by the 4th quarter of this year, oil will be back up to $35 a barrel.
In a tweet on Tuesday though, President Trump suggested that the fight for a bailout for an industry he seems to admire is not over:
Crude Oil prices going up as Saudi Arabia cuts production levels. Our great Energy Companies, with millions of JOBS, are starting to look very good again. At the same time, gasoline prices at record lows (like a big Tax Cut). The BEST of all Worlds. “Transition To Greatness”
— Donald J. Trump (@realDonaldTrump) May 12, 2020
Trump has repeatedly expressed support for the fossil fuel industry. In a news conference April 20th, he declared publicly for a second time even after Democrats and environmentalists repeatedly blocked it, “We’re filling up our national petroleum reserves, strategic, you know the strategic reserves. (Trump was referring to Strategic Petroleum Reserves). And we’re looking to put as much as 75 million barrels into the reserves themselves that would top it out.”
The Federal Reserve has helped oil and gas companies by allowing them to use COVID-19 loans to pay off debt. The loans were intended to help small and medium-sized businesses. This will be particularly useful to Shale oil and gas producers. Some incurred debt to where they drilled oil solely to pay off debt. Billionaire Harold Hamm is the founder of Continental Resources oil company. It is a major shale oil producer. Hamm is a major contributor and supporter of President Trump.
The other firm involved in that closed telemeeting on an oil bailout is also continuing its fossil fuels efforts.
On May 11, Akin Gump announced its seven-week involvement in issuance of $1.5 billion in Eurobonds for a $119 billion Russian oil company. “A team from Akin Gump's Moscow, London, Hong Kong, New York and Washington, D.C. offices advised LUKOIL on the offering, the company’s first debt issuance since 2016.” Wrote Akin gump in a Tweet.
The bond issuance’s purpose appears, at least in part, to help rescue Russia’s largest independent oil company during an oversupply Russia precipitated and the worldwide pandemic’s economic shutdown compounded.
“LUKOIL intends to use the net proceeds for general corporate purposes, including the refinancing of certain existing indebtedness.” wrote Akin Gump.