ReWIND Act Prohibits Bailout of Fossil Fuel Industry with CARES Act Funds During Public Health Crisis

May 05, 2020

Washington, D.C. — Today, members of Congress announced the Resources for Workforce Investments, not Drilling Act (ReWIND Act), which would prevent the Trump Administration from bailing out the fossil fuel industry using CARES Act funds.

Congressmembers Jared Huffman (Calif.), Nanette Diaz Barragán (Calif.), Pramila Jayapal (Wash.), Ilhan Omar (Minn.), and Senator Jeff Merkley (Ore.) introduced the legislation. The bill would safeguard CARES Act taxpayer funds for struggling businesses and Americans out of work because of COVID-19 by making sure they are not used to pay off bad debt taken on by fossil fuel corporations before the public health crisis. North American oil and pipeline companies have more than $200 billion in debt that will mature between 2020 and 2024[i].

“The relief allocated by Congress in the CARES Act is intended to benefit families and small businesses, not bail out oil and gas companies that were failing long before the coronavirus pandemic hit,” Rep. Huffman said. “The Trump administration has proven time and again that it cannot be trusted to act in the country’s -- or the planet’s -- best interests. Any large allocation of money invites misuse, and Congress must take the necessary precautions to ensure that Trump doesn’t use taxpayer money to provide handouts to the fossil fuel industry.”

Rep. Huffman, who chairs the Subcommittee on Water, Oceans, and Wildlife, also participated today in a Natural Resources Committee virtual oversight roundtable on the Trump administration's push to deregulate the fossil fuel industry and other heavy polluters during the COVID-19 pandemic.

In its most blatant attempt to bail out the fossil fuel industry, the Trump Administration abided by the industry’s request to alter the eligibility rules for Federal Reserve’s $600 billion Main Street Lending Program. 

“It would be unconscionable to bail out big oil and gas corporations with money intended to help families, workers and small businesses survive this global pandemic,” said Rep. Barragán. “The CARES Act passed to help Americans struggling to make it through the COVID-19 public health crisis – not to make it easier for fossil fuel companies to drive us closer to climate catastrophe.”

“Our economic recovery from the coronavirus must be built from the ground up—with good, family-supporting jobs in sustainable industries,” said Senator Merkley. “At a time of crisis, we cannot afford to use our public resources to make bad investments in industries that are not only financially risky, but are destroying our planet.”

The ReWIND Act also blocks executive actions the Trump Administration has taken or has indicated an interest in pursuing in order to aid fossil fuel corporations. The Act prevents banks receiving CARES Act funds from becoming owners of distressed oil and gas assets, blocks the waiving of royalty payments for public oil and gas leases, prevents the storage of private oil in the Strategic Petroleum Reserve, and puts a moratorium on new fossil fuel lease sales until the COVID-19 crisis is over.

“We already subsidize fossil fuel companies to the tune of $20 billion every year,” said Rep. Omar. “They didn’t need our help before, and they don’t need it now. Our relief during this crisis should be focused on getting immediate relief to the American people, not large corporations. I am proud to join this legislation to prevent any polluter bailout by Donald Trump and prohibit the Trump Administration from slashing royalty rates for fossil fuel corporations.”

Under the updated requirements the Fed released on April 30, recipients of CARES Act loans to mid-sized and large businesses are under no obligation to use this assistance to keep workers on their payrolls, rehire workers, or assist laid off employees. This indicates the troubling state of this administration’s priorities. It would divert enormous amounts of CARES Act money from struggling families to the shareholders and executives of giant fossil fuel corporations.

“As we aim for bold solutions that meet the scale of this public health and economic crisis, we must include measures to hold industries receiving large sums of cash accountable. The fossil fuel industry receives billions in federal subsidies annually yet remains in economic decline. Meanwhile, more than 30 million Americans have filed for unemployment since this crisis began, businesses continue to lay off workers, and American lives are lost to COVID19 day after day,” Rep.  Jayapal said. “We must make sure the Trump administration does not bail out the fossil fuel industry and that any company receiving federal relief dollars invests first in its workforce. That’s why I am proud to lead the Resources for Workforce Investments, no Drilling (ReWIND) Act, to ensure our dollars protect our health, our earth and our workers.”

The ReWIND Act:

  • Precludes loans, loan guarantees and other financial instruments from the Main Street Lending Programs of the CARES Act from going to fossil fuel companies;
  • Puts a two-year prohibition on banks and other solvent financial institutions who avail themselves of Title IV CARES Act provisions such as debt guarantees, additional borrowing authority or loans or loan guarantees from operating, or making new equity investments in fossil fuel companies.
  • Puts a moratorium on new federal fossil fuel leases until after the COVID-19 National Emergency is over.
  • Caps the Strategic Petroleum Reserve (SPR) at its current physical limit of 713,500,000 barrels and reiterates that private oil cannot be stored in the SPR. 
  • Repeals the statutory authority for Department of the Interior to institute a royalty-in kind program that would accept oil and natural gas from producers in lieu of cash royalties. The royalty-in-kind program was shuttered in 2009 after it was ensnared in a wide-ranging ethics scandal.
  • Takes away the authority under to use title III of the Defense Production Act to provide loans or loan guarantees to fossil fuel companies.
  • Repeals the authority of the Secretary of the Interior to lower royalty rates for fossil fuel leases on federal lands and waters.
  • Eliminates the authority of the Secretary to eliminate or reduce royalty rates for Deep Water leases on the Outer Continental shelf.  This cleans up the existing code, as this authority had expired. 
  • Ensures that the public can participate in rulemakings by extending public comment periods that were already under way until after the COVID-19 national emergency is over. It also suspends new rulemakings that are not specifically in response to the COVID-19 crisis, until after the national emergency is over.

A fact sheet is available here.

Joining Senator Jeff Merkley (Ore.) as original co-sponsors in the Senate are Senators Ed Markey (Mass.), Bernie Sanders (Vt.), Ron Wyden (Ore.), Kamala Harris (Calif.), Corey Booker (N.J.), Kirsten Gillibrand (N.Y.), Richard Blumenthal (Conn.) and Elizabeth Warren (Mass.).

The effort in the House was led by Representatives Jared Huffman (Calif.), Nanette Diaz Barragán (Calif.), Ilhan Omar (Minn.), and Pramila Jayapal (Wash.). Original cosponsors include Reps. Rashida Tlaib (Mich.), Steve Cohen (Tenn.), Alexandria Ocasio-Cortez (N.Y.), Ayanna Pressley (Mass.), Jamie Raskin (Md.), Joseph Kennedy (Mass.), Earl Blumenauer (Ore.), Adriano Espaillat (N.Y.), Eleanor Holmes Norton (D.C.), Jackie Speier (Calif.), Jesus “Chuy” García (Ill.), Barbara Lee (Calif.), Ro Khanna (Calif.), Chellie Pingree (Maine), Grace Napolitano (Calif.), Alan Lowenthal (Calif.), Lucile Roybal-Allard (Calif.), Salud Carbajal (Calif.), Henry C. Johnson (Ga.), Alcee Hastings (Fla.), Jim McGovern (Mass.), Darren Soto (Fla.), Nydia M. Velázquez (N.Y.), Mike Levin (Calif.), Jimmy Gomez (Calif.) and Debbie Wasserman Schultz (Fla.).

Environmental and good government organizations are also lining up to throw their support behind this measure. They include the Sierra Club, Greenpeace USA, Food and Water Action, Oil Change International, Friends of the Earth, Center for Biological Diversity, 350 Action, Sunrise Movement, Climate Justice Alliance, Oxfam America,  Climate Reality Project, Climate Hawks Vote, Earthworks, Women’s Earth and Climate Action Network (WECAN), and the Climate & Energy Program at the Center for International Environmental Law.

"Protecting our families in this time of crisis must be the priority right now, not lining the pockets of fossil fuel executives," said Kelly Martin, Director of the Sierra Club's Beyond Dirty Fuels campaign. "We applaud Sen. Merkley and Rep. Barragan for their leadership in ensuring that relief funds go towards supporting vulnerable communities, not corporate polluters."

“After refusing to evolve and then driving their companies into the ground, oil CEOs are using COVID-19 as an opportunity to keep themselves afloat while workers suffer. The ReWIND Act is our best chance to stop the Trump Administration from bailing out the millionaires who created and profited off of the climate crisis. Right now, we need to make sure all relief goes directly to workers and families, not corporate executives.” - John Noël, Senior Climate Campaigner, Greenpeace USA.

“Reckless corporate polluters that racked up billions in debt should get nothing from the rescue programs that are intended to put Americans back to work. Thanks to the leadership of Senator Merkley and Representative Barragan, this landmark legislation protects public resources from greedy fossil fuel profiteers and can help America create a COVID recovery plan that prioritizes building a safe and healthy future for all,” said Mitch Jones, Policy Director for Food & Water Action.

“The REWIND Act is critical to ensure relief funds are flowing directly to frontline workers and communities, not being hijacked by Big Oil CEOs,” said Collin Rees, Senior Campaigner at Oil Change International. “We’re thankful for champions like Rep. Barragán and Sen. Merkley, and we urge Congress to include these protections in the next stimulus package and focus on supporting workers instead of billionaire executives.”

“Rep. Barragán and Sen. Merkley’s ReWIND Act provides the decisive leadership we need to reject a fossil fuel bailout and the industry’s toxic legacy of polluting communities, endangering workers, and fueling the climate crisis,” said Ben Goloff, Climate Campaigner at the Center for Biological Diversity. “All members of Congress need to choose a side: Will they bail out fossil fuel industry executives or protect workers and communities?”

“The ReWIND Act is exactly the message we need to send to the Administration and those in Congress who support fossil fuel corporations over everyday people,” said Natalie Mebane, Associate Director of U.S. Policy for 350 Action. “While unemployment is at an all-time high due to COVID-19, Trump and his allies in Congress are working overtime to bailout the corporate oil and gas executives driving us deeper into climate disaster instead of those in need.”

Fatema Sumar, Vice President of Global Programs at Oxfam America said, “In the face of unabashed attempts by the oil and gas industry to opportunistically take advantage of coronavirus relief efforts, the ReWIND Act is a necessary bulwark to ensure that relief does not prioritize this sector at the expense of taxpayers and the millions of people suddenly out of work, scrambling to put food on the table and pay the rent, who desperately need relief.

“Propping up fossil fuel companies – which already enjoy hefty subsidies and significant tax breaks, with little oversight and accountability, while also majorly contributing to climate change – is absolutely unacceptable. Instead, coronavirus relief should focus on what people need in this pandemic, including potential retraining for the 51,000 oil sector workers who lost their jobs in March as well as protections for other workers threatened by the economic crisis.

“We applaud the leadership of Sen. Merkley, Reps. Barragán, Omar, Huffman, and Jayapal and their many co-sponsors in Congress to ensure that fossil fuel companies and executives that hold the ear of government are not granted unnecessary bailouts, regulatory rollbacks, or access to US natural resources on the cheap.

“The ReWIND Act is the right start for building an ambitious, sustainable, and inclusive economic recovery that places workers and people over the profits of a politically-entrenched industry.”

"Americans already give the oil and gas industry billions in subsidies,” said Ken Berlin, President and CEO of The Climate Reality Project. “Now they want us to bail them out for bad decisions they made before COVID-19 hit? We should be supporting workers directly, not paying off polluters."

"Bailing out the fossil fuel industry is a complete slap in the face to the millions of people who have lost their jobs, homes, livelihoods, and family members due to COVID-19. We cannot continue as we were – now more than ever we need to address the double crises of the coronavirus pandemic and climate chaos by centering the needs of people and planet. Legislation like the ReWIND Act is necessary for transitioning away from fossil fuels and supporting workers and our communities," said Osprey Orielle Lake, Executive Director of the Women’s Earth and Climate Action Network (WECAN).

 

[i] https://www.nytimes.com/2020/03/20/business/energy-environment/coronavirus-oil-companies-debt.html

 

###