Big Banks Consider Buying Up Fracking Industry Assets with Coronavirus Bailout Money
Most people would agree taxpayers’ money shouldn’t be used to bail out oil and gas companies that were already in trouble before the pandemic.
You don’t have to be a climate advocate to be against using the coronavirus relief package passed by Congress to bail out the oil and gas fracking industry. Anyone who understands the supply-demand balance in the oil market understands that the world drowning in oil and that the accelerating technologies in wind, solar, and battery technology is bringing the world to the end of the age of oil.
The news media on Thursday have begun to report that despite the massive glut in the world oil market JPMorgan Chase, Wells Fargo, Bank of America, and Citigroup are planning to take over distressed oil and gas companies assets. In the wake of an industry collapse, and that these banks are likely going to use their access to new federal bailout money passed by Congress in the $2T coronavirus relief package to do it.
While its true environmentalists are already screaming the loudest to prevent these banks from using the $2T coronavirus relief package to buy these fracking assets, they are on point with their argument Sierra Club campaign representative Ben Cushing said in a statement.
“It’s never been more obvious that fossil fuels are a bad investment, and yet rather than following their supposed commitments to climate action, these big banks are doubling down on their toxic investments and getting directly into the fossil fuel business.”
Reuters reported Thursday, the decision by the banks to look into taking over oil and gas companies comes in the wake of oil price drops in March that have led to the potential for fossil fuel companies to go bankrupt under the strain of the collapse of the fracking industry.
Rainforest Action Network senior campaigner Jason Opeña Disterhoft said …
“This development exposes the central role of banks in fossil fuels and clearly illustrates the riskiness of fossil finance.”
350.org founder Bill McKibben said in a statement Friday…
“So Chase and Wells Fargo want to cut out the middleman and go into the oil business, directly destroying the climate? Greed does weird things to your mind and your heart.”
Economic journalist Doug Henwood told Common Dreams Friday…
“It’s appalling that public money from the CARES Act could be used for bailing out oil and gas companies.
“Our bankruptcy laws have several purposes…One is to save a business that is otherwise healthy that just has too much debt. Wipeout some of the debt, and the business can come back. But some businesses should just be wound down, and bankruptcy is an orderly way to do that. That’s the case for fracking, which makes neither economic nor ecological sense.”
“Fracking requires huge, high-risk investments, and the wells can run dry before all the bills are paid… It’s a filthy business in itself, poisoning the groundwater. And when the fuel it yields is burned, it fills the air with carbon. We should be phasing out carbon as quickly as possible, and fracking is an excellent place to start. By all means, support displaced workers and communities, but let these monsters go under.”
Dallas Goldtooth, Keep it in the Ground Campaigner for the Indigenous Environmental Network said in a statement….
“Indigenous communities from Alaska to the Gulf Coast are in dire straits due to the destruction of fossil fuel corporations. Sexual violence is rampant with the fossil fuel industry in our communities…If these banks want to get their hands even more bloody, so be it, we are taking tally, and best believe, all banks will be held accountable for the attacks on our nations, communities, bodies, and lands.”
Oil Change International senior campaigner Collin Rees said that the bank's proposal…
“Would be a catastrophic mistake for communities and climate, any words JPMorgan Chase, Wells Fargo, Bank of America, and Citi have ever said about climate action would be instantly meaningless.”
“The fossil fuel industry needs a just transition for workers and a swift phase-out of production, not a transfer of the keys to predatory financial institutions focused on profits for billionaires.”
Caroline Henderson, a Greenpeace USA senior climate campaigner, said, the purpose of the stimulus was not to allow big banks to take over the climate-killing fossil fuel industry…
“If the Fed and these banks rescue already failing oil and gas companies instead of winding their operations down, taking care of their workers, and retiring their unburnable reserves, they are deepening the risks of the COVID-19 crisis…These financial institutions are fueling future public health threats and systemic financial risks that are a certain consequence of climate change.”
“Taxpayers shouldn’t be required to backstop oil and gas companies that were already in trouble prior to the pandemic,”
James Davidson, a legendary investor who writes Strategic Investment and is an oil and gas expert, points out that OPEC+ legitimately cuts 12-15 million barrels of production for a year, maybe two years as opposed to the 10 million barrels in production their discussing cutting for just two months. The price of oil could plummet to $10-$12 a barrel from the $26-$32 range its currently trading, depending on the grade.
That would mean these banks using the coronavirus bailout money would lose most if not all the money they use to buy these oil and gas assets. Davidson call’s it …