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Marathon Petroleum Takes Bailout Tax Breaks During Pandemic

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Marathon Petroleum Takes Bailout Tax Breaks During Pandemic
Marathon Petroleum, the largest oil refiner in the country, has a history of air pollution violations impacting low-income and Black and Brown communities. Notorious4life / Wikimedia Commons

By Sarah Thomas and Nathan Heffernan

Fossil fuel companies have reaped millions of dollars in benefits from a stimulus package intended to help struggling Americans and the economy. Among these is Marathon Petroleum, the largest oil refiner in the country, which has a history of air pollution violations impacting low-income and Black and Brown communities.

Oil Companies Receiving Bailout Money

The CARES Act included several provisions to support businesses, one of which allowed companies to claim an immediate tax refund by deducting current operating losses from income taxes paid in the past five years. As a result of changes to allow the "carryback" of net operating losses, Marathon received $411 million in tax benefits, a sum even greater than their recent $334 million penalty for environmental violations. The Federal Reserve also included Marathon Petroleum in its recent purchase of energy bonds.

Oil and gas companies, like Marathon, are not violating any rules by claiming this tax benefit, but there are significant downsides to using public resources to prop up dirty companies with a history of air pollution violations in the midst of a pandemic that targets the respiratory system. As part of the paycheck protection program, a separate program under the CARES Act, at least $3 billion in taxpayer dollars intended for small businesses have gone to over 5,600 U.S. fossil fuel companies and are being used to save an antiquated industry, rather than investing in a sustainable future that will benefit all Americans.

Democratic lawmakers have warned that this oil bailout is not only taking the funds meant for smaller businesses, but is also forcing taxpayers to pay for the industry's past mistakes. Senators Brian Schatz and Sheldon Whitehouse wrote that the pandemic "was not the source of the oil and gas industry's dire financial condition," and that this bailout "poses both a credit risk and a more profound climate transition risk to taxpayers."

Marathon Petroleum is just one example of an oil company that was already struggling prior to the COVID-19 outbreak, partly due to their expensive 2018 acquisition of rival refiner Andeavor. Oil companies have been pursuing such mergers in an attempt to generate investor excitement and make up for the structural weaknesses of the oil sector. More specifically, upstream companies have spent billions more on drilling than they receive from selling the produced oil and gas, which creates a condition known as negative free cash flow. Investing in oil stock has had a similarly negative trajectory, as the average U.S. oil producer over the past three years has produced a total return of negative 17%.

A History of Environmental Racism

The acquisition of Andeavor and other refineries has made Marathon Petroleum the largest refiner in the U.S. with a long list of costly penalties. All told, Marathon and its acquired companies have been fined more than $1.4 billion in environmental, consumer protection and workplace violations since 2000. A significant recent example was its $334 million settlement with the EPA in 2016 to reduce air pollutants in five states: Michigan, Louisiana, Ohio, Kentucky, and Illinois. The EPA announced that the required investments in air pollution controls would "help reduce emissions that can cause respiratory and cardiovascular health impacts, which can disproportionately affect low-income and vulnerable populations."

Many of Marathon's refineries have notably high indicators for Environmental Justice Indexes, signifying high levels of air pollution among minority and at-risk groups. For the 1-mile radius surrounding the Detroit, Michigan refinery, the surrounding communities score above the state 90th percentile for diesel particulate matter, air toxics cancer risk, and respiratory hazard index. The Canton, Ohio refinery additionally scores around the 75th percentile in these indexes. The Garyville, Louisiana refinery — located in Louisiana's infamous "Cancer Alley" — scores in the 99th percentile country-wide for air toxics cancer risk. The Political Economy Research Institute lists Marathon as the 33rd worst air polluter in the nation, with an Environmental Justice Minority Share of 59%, meaning that its refineries disproportionately impact communities of color.

Despite the 2016 EPA settlement, communities living nearby to the refineries continue to face environmental injustices and deadly air pollution. In Southwest Detroit, the predominantly Black zip code 48217, the most polluted area in Michigan, is home to dozens of polluting facilities, including the Marathon Petroleum refinery. This residential area experiences higher rates of asthma and cancer than the rest of the country due to toxic pollution. Community organizers and environmental justice groups have protested the Marathon refinery over the past decade, calling for accountability from the oil giant and buy-outs for their now devalued property.

In September 2019, an alleged vapor leak sparked further protests as Marathon failed to inform residents of the dangers and health impacts of chemicals released. Prior to the September incident, an earlier vapor release in February of 2019 caused residents to complain of "a nauseating stench" and of "vomiting, troubled or labored breathing, and irritated eyes and throats" reported the Metro Times. The September incident prompted U.S. Rep. Rashida Tlaib and the U.S. House Committee on Oversight and Reform in February 2020 to request that the EPA undertake a formal investigation of the chemical leak by Marathon. The facility is the only oil refinery in Michigan, and as Metro Times reports "emits 29 different types of toxins, which waft across neighborhoods and puts residents at an elevated risk of cancer, respiratory disease, asthma, and liver failure."

The impacts on nearby communities does not stop at environmental health. Marathon and its affiliates have also racked up nearly $40 million in penalties for workplace safety or health violations, according to the Violationtracker website.

Lobbying Against Common-Sense Solutions

The CARES Act bailout to Marathon Petroleum, a significant air polluter, is further concerning given the lobbying ties the fossil fuel giant has with the Trump administration. In May 2020, the House Oversight Committee requested documents from Marathon Petroleum related to its extensive lobbying efforts related to Trump's rollback of fuel economy standards — a rule change that has already been mired in scandal. In 2018, Gary Heminger, Marathon's former CEO, told investors the new rule would help sell up to 400,000 more barrels of oil a day. The investigation seeks documents detailing meetings with top officials at the EPA and the Department of Transportation.

While the CARES Act is necessary for stimulating the economy during this crisis, large hand-outs to notorious air polluters must be scrutinized. Air pollution exposure has been linked to increasing incidence and severity of several respiratory infections that are similar to COVID-19. Residential areas surrounding oil refineries such as Marathon Petroleum are often predominantly Black communities, which are already affected disproportionately by the pandemic. The bailout money towards Marathon Petroleum maintains oil refineries that pollute surrounding communities, worsening the health and economic impacts of the Covid pandemic.

Our recovery from this crisis shouldn't worsen existing public health problems or lock us into higher greenhouse gas emissions. We need a green and just recovery that puts us on a path to the sustainable future we need.

Reposted with permission from Greenpeace.

A net-casting ogre-faced spider. CBG Photography Group, Centre for Biodiversity Genomics / CC BY-SA 3.0

Just in time for Halloween, scientists at Cornell University have published some frightening research, especially if you're an insect!

The ghoulishly named ogre-faced spider can "hear" with its legs and use that ability to catch insects flying behind it, the study published in Current Biology Thursday concluded.

"Spiders are sensitive to airborne sound," Cornell professor emeritus Dr. Charles Walcott, who was not involved with the study, told the Cornell Chronicle. "That's the big message really."

The net-casting, ogre-faced spider (Deinopis spinosa) has a unique hunting strategy, as study coauthor Cornell University postdoctoral researcher Jay Stafstrom explained in a video.

They hunt only at night using a special kind of web: an A-shaped frame made from non-sticky silk that supports a fuzzy rectangle that they hold with their front forelegs and use to trap prey.

They do this in two ways. In a maneuver called a "forward strike," they pounce down on prey moving beneath them on the ground. This is enabled by their large eyes — the biggest of any spider. These eyes give them 2,000 times the night vision that we have, Science explained.

But the spiders can also perform a move called the "backward strike," Stafstrom explained, in which they reach their legs behind them and catch insects flying through the air.

"So here comes a flying bug and somehow the spider gets information on the sound direction and its distance. The spiders time the 200-millisecond leap if the fly is within its capture zone – much like an over-the-shoulder catch. The spider gets its prey. They're accurate," coauthor Ronald Hoy, the D & D Joslovitz Merksamer Professor in the Department of Neurobiology and Behavior in the College of Arts and Sciences, told the Cornell Chronicle.

What the researchers wanted to understand was how the spiders could tell what was moving behind them when they have no ears.

It isn't a question of peripheral vision. In a 2016 study, the same team blindfolded the spiders and sent them out to hunt, Science explained. This prevented the spiders from making their forward strikes, but they were still able to catch prey using the backwards strike. The researchers thought the spiders were "hearing" their prey with the sensors on the tips of their legs. All spiders have these sensors, but scientists had previously thought they were only able to detect vibrations through surfaces, not sounds in the air.

To test how well the ogre-faced spiders could actually hear, the researchers conducted a two-part experiment.

First, they inserted electrodes into removed spider legs and into the brains of intact spiders. They put the spiders and the legs into a vibration-proof booth and played sounds from two meters (approximately 6.5 feet) away. The spiders and the legs responded to sounds from 100 hertz to 10,000 hertz.

Next, they played the five sounds that had triggered the biggest response to 25 spiders in the wild and 51 spiders in the lab. More than half the spiders did the "backward strike" move when they heard sounds that have a lower frequency similar to insect wing beats. When the higher frequency sounds were played, the spiders did not move. This suggests the higher frequencies may mimic the sounds of predators like birds.

University of Cincinnati spider behavioral ecologist George Uetz told Science that the results were a "surprise" that indicated science has much to learn about spiders as a whole. Because all spiders have these receptors on their legs, it is possible that all spiders can hear. This theory was first put forward by Walcott 60 years ago, but was dismissed at the time, according to the Cornell Chronicle. But studies of other spiders have turned up further evidence since. A 2016 study found that a kind of jumping spider can pick up sonic vibrations in the air.

"We don't know diddly about spiders," Uetz told Science. "They are much more complex than people ever thought they were."

Learning more provides scientists with an opportunity to study their sensory abilities in order to improve technology like bio-sensors, directional microphones and visual processing algorithms, Stafstrom told CNN.

Hoy agreed.

"The point is any understudied, underappreciated group has fascinating lives, even a yucky spider, and we can learn something from it," he told CNN.

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