Critics are denouncing as ‘corporate socialism’ the Trump administration’s reported consideration to offer oil and gas companies in the U.S. fracking industry a massive bailout amid a drop in prices that comes amid the global coronavirus outbreak.
“Corporate socialists seek welfare from Trump administration,” tweeted journalist David Cay Johnson, in response to reporting by the Washington Post on Tuesday.
According to the Post, the administration is looking to bail out the fracking sector due to its instability in the wake of the ongoing financial downturn:
White House officials are alarmed at the prospect that numerous shale companies, many of them deep in debt, could be driven out of business if the downturn in oil prices turns into a prolonged crisis for the industry. The federal assistance is likely to take the form of low-interest government loans to the shale companies, whose lines of credit to major financial institutions have been choked off, three people said.
Alex Doukas, lead analyst for Oil Change International, predicted Monday that such a move was likely on the horizon.
“With oil prices in free fall, expect oil companies to turn to their age-old tactic of bullying governments for even more subsidies on top of the hundreds of billions they benefit from annually,” said Doukas. “Instead of more handouts to polluters, governments should make big investments in high-quality green jobs that will put people to work and ultimately end our dependence on the volatile fossil fuels that create climate chaos.”
Progressives pushed back on the administration’s rationale, pointing out that the fracking industry has been in trouble for years and that executives are now exploiting the coronavirus outbreak as an excuse to get a government bailout.
“This is insane—shale companies have been struggling for years because their product never made economic sense in the first place, never mind environmental sense,” tweeted journalist Amy Westervelt. “Now we’re gonna use coronavirus as an excuse to bail them out? Unbelievable.”
In a statement, Food & Water Watch executive director Wenonah Hauter called the administration’s proposal “a desperate move to protect corporations and billionaires.”
“The fracking industry has been on the financial ropes for years because their business model is to flood supply and then push for artificial demand,” said Hauter. “Using a worldwide public health crisis to bail out the fracking industry now would be a disgraceful waste of taxpayer dollars, and would spell further climate calamity.”
“We shouldn’t be shocked that Trump puts his billionaire friends ahead of workers and the climate, but everyone should be outraged,” Hauter added.
The administration began weighing a bailout after Trump supporter Harold Hamm—a Trump supporter whose company’s stock plunged Monday, losing Hamm $2 billion of his 77% of the company’s shares—reached out to the administration. Hamm confirmed the conversation to the Post.
Hamm was not alone—the Post revealed that a number of executives have made overtures to the White House on policy aims that run counter to public health.
As the Post reported:
Trump and advisers have been taking calls since Monday from concerned energy sector allies, who have voiced concern and at times exasperation not only about oil prices, but also privately warning against the administration supporting any sweeping paid sick leave policy, according to a major GOP donor and a White House official familiar with the discussions.
Greenpeace USA senior climate campaigner Jack Shapiro said in a statement that Trump bailing out the oil and gas industry was not a surprise but that the crisis should inspire a different kind of reaction.
“In a global health and economic crisis, Trump will save himself and his cronies while the rest of the world suffers,” said Shapiro. “The last people who deserve taxpayers’ money are the billionaires that created and profited from the climate crisis.”
“The right thing to do right now is support those feeling the immediate impacts and invest in an economy beyond fossil fuels that provides working families with long-term prosperity and economic security,” Shapiro continued. “Handouts to oil CEOs and wealthy shareholders won’t deliver that, but a Green New Deal can.”
Progressive advocacy group Swing Left, on Twitter, called for a change in government priorities.
“Help sick people,” the group tweeted, “not sick companies.”