Oil and Gas Companies Continue to Lead on Getting Government Handouts

Photo: Society of Environmental Journalists

Oil and gas companies continue to pump the government for cash.  Bloomberg Law News reported that the Administration has granted 76 royalty waivers to oil and gas companies who are drilling for oil on federal land in Utah — lowering the rates from 12.5% to as low as 2.5%.  And E&E News reported that the government agency that manages these royalties has received more than 1,000 applications  — some companies are requesting royalty rates lowered down to 0.5%.  The Washington Post likewise reported on another 21 companies that are using Paycheck Protection Program loans to keep their doors open even though they could not qualify for conventional bank loans because they have been experiencing “sharp stock declines, millions of dollars in losses over the past year,” with no market for their product given large global surpluses of oil, coal, and gas.

Why This Matters:  The giveaways to oil and gas companies in the name of saving jobs just keep coming.  But these companies are taking public money that could be better spent on jobs that will last into the future in the renewable energy sector, which truly has been deeply harmed by the pandemic.  The renewable energy industry is angry and beginning to criticize the Democrats for not helping them despite repeated requests.

PPP Loans For Companies Already on Life Support

The Paycheck Protection Program loans do not need to be paid back if 75% of the money is spent on “wages and benefits.”  The loans were supposed to be for small businesses of 500 employees or less, but oil and gas companies have a special higher employee limit, and of the 21 companies receiving these funds, 11 got more than $5m each, which puts them in the top .25% of all loans.  The Post tells the story of several of them.  Companies like Rhino Rhino Resource Partners, a company whose stock price had dropped 65% before the pandemic hit, that operates coal mines in Appalachia, Illinois, and Utah, which is losing money badly due to the low price of natural gas and a sharp drop in demand for coal.  They got the maximum loan amount — $10m — despite the fact that they had unpaid fines of $411,000 last year for 191 health and safety violations last year.

Royalty Relief for Worthless Oil

It is no wonder oil and gas companies want royalty relief — because the oil and gas are not profitable anyway — and they were threatening to stop production.  The industry had requested a blanket royalty waiver for all leases on federal “onshore” lands and for leases in the Gulf of Mexico, but the government said no to that.  Instead, the government promised expedited reviews of requests and granted all of them for Utah leases.  The waivers are being reviewed by individual state offices of the agency that manages the leases.  The process for royalty relief for offshore leases in the Gulf of Mexico is longer and more difficult.

 

Up Next

Majority of Americans Support Clean Energy By 2035

Majority of Americans Support Clean Energy By 2035

By Ashira Morris, ODP Staff Writer Would you support or oppose the government moving the country to a 100% clean energy electricity grid by 2035? That’s the question Washington-based think tank Third Way posed across the country. It turns out that a majority of voters support federal action to reach a 100% clean energy grid. […]

Continue Reading 360 words
Largest Potential Solar Farm in U.S. Halted After Local Protests

Largest Potential Solar Farm in U.S. Halted After Local Protests

Last week, the Battle Born Solar Project in Nevada, which would have been the largest solar farm in the US, was canceled after a coalition of local activists lobbied against it for being an “eyesore.” As Electrek reported, California-based Arevia Power and Solar Partners VII LLC withdrew their application with the Bureau of Land Management […]

Continue Reading 420 words
EU Climate Policy: New Costs for Polluting Heat and Transportation

EU Climate Policy: New Costs for Polluting Heat and Transportation

by Ashira Morris, ODP Staff Writer Carbon pricing has been a part of how the European Union penalizes carbon emissions since 2005. As part of the EU’s Fit for 55 update to the carbon market, emission trading expands to include heating and road transportation. However, instead of folding them into the broader market, these two […]

Continue Reading 355 words

Want the planet in your inbox?

Subscribe to the email that top lawmakers, renowned scientists, and thousands of concerned citizens turn to each morning for the latest environmental news and analysis.