Fed's Corporate Debt-Buying Could Mean Billion-Dollar Big Oil Bailout
By Jessica Corbett
As calls for a People's Bailout in response to the coronavirus pandemic continue to grow across the United States, a new analysis warns that the country's Big Oil companies "stand to reap yet another billion dollar bailout" thanks to the Federal Reserve's plans to buy up to $750 billion in corporate debt.
The analysis (pdf), released Wednesday by the advocacy group Friends of the Earth (FOE), explains that this expected bailout for polluters relates to a controversial $500 billion corporate slush fund included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act that Congress passed in March.
According to FOE's report, The Big Oil Money Pit:
Of that amount, Treasury Secretary Steven Mnuchin enjoys direct control over a comparatively small $46 billion reserved for aviation and industries deemed essential to "national security." But the remaining $454 billion went to the Federal Reserve, which will use the money to implement emergency lending programs for corporations and municipalities. Secretary Mnuchin must approve these lending programs and wields considerable power over their design, but the money itself will move through the Fed.
After weeks of unprecedented human suffering and an ongoing failure to support frontline workers, the Fed announced on April 9, 2020 how it would spend the first $195 billion of the slush fund. A full $75 billion would go to buy corporate debt. But because the Fed can leverage money appropriated by Congress, the real size of this program is $750 billion. Considering that a majority of the money from the first stimulus [is] still unspent, there is plenty of room for this program to grow.
FOE found that the fossil fuel giants ExxonMobil, Chevron, and Conoco "are together eligible for a maximum $19.4 billion in benefits, based on their credit ratings and outstanding long-term debt."
NEW ANALYSIS: Trump’s admin just announced a $750 billion corporate slush fund -- money that will enrich oil execs… https://t.co/9fz8NWZzDv— Friends of the Earth (@Friends of the Earth)1586967067.0
The Fed has hired BlackRock, the world's largest asset manager, to administer part of its debt-buying efforts related to the pandemic. "As BlackRock begins purchasing 'high yield' exchange-traded funds (ETFs) to bolster corporate debt markets," FOE warns, "energy companies (predominantly oil and gas) stand to benefit disproportionately as the largest single issuer of junk bonds, at 11% of the entire U.S. market."
Other key takeaways from the report include:
- 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.
Echoing climate campaigners' comments after President Donald Trump met with fossil fuel executives at the White House earlier this month, FOE senior policy analyst Lukas Ross said in a statement Wednesday that "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," Ross declared. "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," he added. "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."
As the Trump administration has tried to spend billions of taxpayers dollars to "fill up" the country's Strategic Petroleum Reserve (SPR) and major banks are reportedly preparing to take over fossil fuel assets with CARES Act funding, climate action advocates have charged that "we need a people's bailout, not a polluters' bailout!"
Hundreds of community leaders, lawmakers, and groups—including FOE—have joined the demand for Congress to pursue a people's bailout guided by five key principles:
The response to one existential crisis must not fuel another. Let's not perpetuate the status quo of fossil fuel pr… https://t.co/VJPOCAFuxd— Sierra Club (@Sierra Club)1586888707.0
The new FOE report includes some specific calls to action directed at Congress:
- Prioritize direct aid to still neglected workers and communities on the frontlines of the crisis.
- Engage in aggressive oversight to ensure BlackRock does not benefit unfairly from purchasing its own products or needlessly bolster fossil fuel assets.
- Eliminate Secretary Mnuchin's authority to waive crucial protections banning companies receiving bailouts stock buybacks.
- Make future stimulus aid conditional on new and binding protections for workers and the environment.
- Make oil, gas, and coal companies ineligible for support from existing stimulus programs, unless it is conditioned on a phaseout of existing production and an iron-clad commitment to existing pension and environmental liabilities.
"Much more work needs to be done, both to support workers and families in the face of COVID-19 and to prevent a runaway bailout of the fossil fuel industry," the report says. "Congress cannot afford to wait."
Reposted with permission from Common Dreams.
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By Tara Lohan
Warming temperatures on land and in the water are already forcing many species to seek out more hospitable environments. Atlantic mackerel are swimming farther north; mountain-dwelling pikas are moving upslope; some migratory birds are altering the timing of their flights.
Numerous studies have tracked these shifting ranges, looked at the importance of wildlife corridors to protect these migrations, and identified climate refugia where some species may find a safer climatic haven.
"There's a huge amount of scientific literature about where species will have to move as the climate warms," says U.C. Berkeley biogeographer Matthew Kling. "But there hasn't been much work in terms of actually thinking about how they're going to get there — at least not when it comes to wind-dispersed plants."
Kling and David Ackerly, professor and dean of the College of Natural Resources at U.C. Berkeley, have taken a stab at filling this knowledge gap. Their recent study, published in Nature Climate Change, looks at the vulnerability of wind-dispersed species to climate change.
It's an important field of research, because while a fish can more easily swim toward colder waters, a tree may find its wind-blown seeds landing in places and conditions where they're not adapted to grow.
Kling is careful to point out that the researchers weren't asking how climate change was going to change wind; other research suggests there likely won't be big shifts in global wind patterns.
Instead the study involved exploring those wind patterns — including direction, speed and variability — across the globe. The wind data was then integrated with data on climate variation to build models trying to predict vulnerability patterns showing where wind may either help or hinder biodiversity from responding to climate change.
One of the study's findings was that wind-dispersed or wind-pollinated trees in the tropics and on the windward sides of mountain ranges are more likely to be vulnerable, since the wind isn't likely to move those dispersers in the right direction for a climate-friendly environment.
The researchers also looked specifically at lodgepole pines, a species that's both wind-dispersed and wind-pollinated.
They found that populations of lodgepole pines that already grow along the warmer and drier edges of the species' current range could very well be under threat due to rising temperatures and related climate alterations.
"As temperature increases, we need to think about how the genes that are evolved to tolerate drought and heat are going to get to the portions of the species' range that are going to be getting drier and hotter," says Kling. "So that's what we were able to take a stab at predicting and estimating with these wind models — which populations are mostly likely to receive those beneficial genes in the future."
That's important, he says, because wind-dispersed species like pines, willows and poplars are often keystone species whole ecosystems depend upon — especially in temperate and boreal forests.
And there are even more plants that rely on pollen dispersal by wind.
"That's going to be important for moving genes from the warmer parts of a species' range to the cooler parts of the species' range," he says. "This is not just about species' ranges shifting, but also genetic changes within species."
Kling says this line of research is just beginning, and much more needs to be done to test these models in the field. But there could be important conservation-related benefits to that work.
"All these species and genes need to migrate long distances and we can be thinking more about habitat connectivity and the vulnerability of these systems," he says.
The more we learn, the more we may be able to do to help species adapt.
"The idea is that there will be some landscapes where the wind is likely to help these systems naturally adapt to climate change without much intervention, and other places where land managers might really need to intervene," he says. "That could involve using assisted migration or assisted gene flow to actually get in there, moving seeds or planting trees to help them keep up with rapid climate change."
Tara Lohan is deputy editor of The Revelator and has worked for more than a decade as a digital editor and environmental journalist focused on the intersections of energy, water and climate. Her work has been published by The Nation, American Prospect, High Country News, Grist, Pacific Standard and others. She is the editor of two books on the global water crisis. http://twitter.com/TaraLohan
Reposted with permission from The Revelator.
The last Ice Age eliminated some giant mammals, like the woolly rhino. Conventional thinking initially attributed their extinction to hunting. While overhunting may have contributed, a new study pinpointed a different reason for the woolly rhinos' extinction: climate change.
The last of the woolly rhinos went extinct in Siberia nearly 14,000 years ago, just when the Earth's climate began changing from its frozen conditions to something warmer, wetter and less favorable to the large land mammal. DNA tests conducted by scientists on 14 well-preserved rhinos point to rapid warming as the culprit, CNN reported.
"Humans are well known to alter their environment and so the assumption is that if it was a large animal it would have been useful to people as food and that must have caused its demise," says Edana Lord, a graduate student at the Center for Paleogenetics in Stockholm, Sweden, and co-first author of the paper, Smithsonian Magazine reported. "But our findings highlight the role of rapid climate change in the woolly rhino's extinction."
The study, published in Current Biology, notes that the rhino population stayed fairly consistent for tens of thousands of years until 18,500 years ago. That means that people and rhinos lived together in Northern Siberia for roughly 13,000 years before rhinos went extinct, Science News reported.
The findings are an ominous harbinger for large species during the current climate crisis. As EcoWatch reported, nearly 1,000 species are expected to go extinct within the next 100 years due to their inability to adapt to a rapidly changing climate. Tigers, eagles and rhinos are especially vulnerable.
The difference between now and the phenomenon 14,000 years ago is that human activity is directly responsible for the current climate crisis.
To figure out the cause of the woolly rhinos' extinction, scientists examined DNA from different rhinos across Siberia. The tissue, bone and hair samples allowed them to deduce the population size and diversity for tens of thousands of years prior to extinction, CNN reported.
Researchers spent years exploring the Siberian permafrost to find enough samples. Then they had to look for pristine genetic material, Smithsonian Magazine reported.
It turns out the wooly rhinos actually thrived as they lived alongside humans.
"It was initially thought that humans appeared in northeastern Siberia fourteen or fifteen thousand years ago, around when the woolly rhinoceros went extinct. But recently, there have been several discoveries of much older human occupation sites, the most famous of which is around thirty thousand years old," senior author Love Dalén, a professor of evolutionary genetics at the Center for Paleogenetics, said in a press release.
"This paper shows that woolly rhino coexisted with people for millennia without any significant impact on their population," Grant Zazula, a paleontologist for Canada's Yukon territory and Simon Fraser University who was not involved in the research, told Smithsonian Magazine. "Then all of a sudden the climate changed and they went extinct."
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Transitioning to renewable energy can help reduce global warming, and Jennie Stephens of Northeastern University says it can also drive social change.
For example, she says that locally owned businesses can lead the local clean energy economy and create new jobs in underserved communities.
"We really need to think about … connecting climate and energy with other issues that people wake up every day really worried about," she says, "whether it be jobs, housing, transportation, health and well-being."
To maximize that potential, she says the energy sector must have more women and people of color in positions of influence. Research shows that leadership in the solar industry, for example, is currently dominated by white men.
"I think that a more inclusive, diverse leadership is essential to be able to effectively make these connections," Stephens says. "Diversity is not just about who people are and their identity, but the ideas and the priorities and the approaches and the lens that they bring to the world."
So she says by elevating diverse voices, organizations can better connect the climate benefits of clean energy with social and economic transformation.
Reposted with permission from Yale Climate Connections.