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Bailed Out and Propped Up: US Fossil Fuel Pandemic Bailouts Climb Towards $15 Billion
By Dan L. Wagner, Christopher Kuveke, Alan Zibel, and Lukas Ross - Bailout Watch, Public Service, Friends of the Earth, November 2022
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.
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