May 07, 2020

Senator Warren to Secretary Mnuchin: No Bailouts for the Oil and Gas Industry

Letter Comes as Treasury Considers Special CARES Act Lending Program for Non-Creditworthy Oil Companies

Fossil Fuel Industry Already Receives Billions in Taxpayer Subsidies Annually

Text of Letter (PDF)

Washington, D.C. - United States Senator Elizabeth Warren (D-Mass.), a member of the Senate Banking Committee, sent a letter to Treasury Secretary Steven Mnuchin expressing serious concerns regarding reports that Treasury is considering new programs to bail out oil and gas companies using loans backed by taxpayer funds under the Coronavirus Aid, Response, and Economic Stability (CARES) Act.

"These companies have contributed to the deterioration of the environment through their emissions, and their lobbying and political expenditure efforts have undermined efforts to identify and address the risks of the climate crisis," wrote Senator Warren. "The fossil fuel industry already receives billions of dollars in taxpayer subsidies annually. These companies do not deserve special access to taxpayer-financed bailout funds at a time when millions of Americans are struggling to make ends meet."

Secretary Mnuchin has made comments in recent weeks suggesting that he is considering plans to provide financial assistance to the oil and gas industry amid the coronavirus disease 2019 (COVID-19) pandemic, including the creation of a new, taxpayer-funded lending facility to allow non-creditworthy oil companies exclusive access to funds. Lobbyists representing the oil industry have already  successfully advocated for the Federal Reserve to modify the terms of its Main Street lending program  to allow borrowers to use the money to cover their past debts rather than continue to pay and employ workers on the frontlines.

In her letter, Senator Warren questioned the need for a new program, noting that these companies-which receive roughly $20 billion in direct federal subsidies per year and cause trillions of dollars per year in societal costs around the world-will already have access to credit under the facilities the Fed has started to roll out. The senator urged Secretary Mnuchin to halt these plans and instead work to protect workers in the renewable energy sector, which represents a growing percentage of the nation's energy mix and may suffer significant losses of jobs and income.

"I urge you to immediately halt any plans to bail out fossil fuel companies, whether in the form of a separate facility or the modification of one of the Fed's existing facilities, and instead focus the Trump administration's efforts on the workers and companies with legitimate needs who have been harmed by the economic collapse associated with the COVID-19 pandemic," the senator continued.

At a Senate Banking Committee hearing yesterday, Senator Warren questioned Brian Miller, President Trump's nominee for Special Inspector General for Pandemic Recovery, on how exactly he would oversee bailout relief funds. The senator secured from Mr. Miller a commitment to transparency and investigations into any potential conflicts of interest or abuse of bailout funds--including any funds that go to companies after lobbying the White House or Congress.