Republicans complain about 'discrimination' against oil companies amid pandemic

A group of 14 Republican senators and 22 Republican representatives wrote a letter to the Trump administration on Thursday to complain that some banks are not making loans to the fossil fuel industry.

They accused the financial industry of “discriminatory tactics” against “America’s energy sector and the hard working families that support it” and asked for government intervention on their behalf.

The lawmakers complained that some banks, which are able to make government-backed loans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, are not making those or other loans to coal, oil, and gas companies.

“As every sector of our economy struggles to survive the COVID-19 pandemic and seeks financial stability from the federal government, environmental extremists are using the pandemic to accelerate their goal of putting America’s energy jobs in the grave,” their letter charged. “We urge you and your Administration to use every administrative and regulatory tool at your disposal to prevent America’s financial institutions from discriminating against America’s energy sector while they simultaneously enjoy the benefits of federal government programs.”

The lawmakers added that, “Wall Street’s big banks, for example, should not be able to reap the benefits of participating in federally guaranteed loan programs laid out in the CARES Act, such as the Paycheck Protection Program or the trillion dollar 13(3) Federal Reserve facility lending programs, while simultaneously targeting American energy companies and workers…”

Over the past several years, several financial institutions have announced they would take steps to curb their investment in dirty energy, following pressure from both environmental groups and investors.

Larry Fink, CEO of investment management company BlackRock, noted in a letter to CEOs in January that climate change has “become a defining factor in companies’ long-term prospects.”

“The evidence on climate risk is compelling investors to reassess core assumptions about modern finance. Research from a wide range of organizations — including the UN’s Intergovernmental Panel on Climate Change, the BlackRock Investment Institute, and many others,” he wrote, “including new studies from McKinsey on the socioeconomic implications of physical climate risk — is deepening our understanding of how climate risk will impact both our physical world and the global system that finances economic growth.”

“There’s cold, hard economic arguments to be made for reducing and stopping investments in fossil fuels,” the Sierra Club’s Ben Cushing told the American Banker in February. “Even if you’re only looking to make a buck, I think big banks and financial institutions around the world are recognizing that this is not even a good way to make money, let alone what their responsibility is for protecting the planet.”

GOP lawmakers, who receive significant campaign contributions from the fossil fuel sector, are now mad that those companies are facing increased scrutiny from lenders — including those that are collecting 1% to 5% in fees from the coronavirus response loans.

“Across the United States, and particularly in Alaska, energy workers are being laid off, rigs are shutting down and future investments are being drastically cut. At that same time, some of America’s Big Banks—bending to a radical environmentalist lobby—have chosen this moment of national crisis to target energy projects and further harm our energy workers—all the while reaping the benefits of federal funding intended to help these workers,” Sen. Dan Sullivan (R-AK) complained in a Friday press release.

“As every sector of our economy struggles to survive the COVID-19 pandemic and seeks financial stability from the federal government, environmental extremists are using the pandemic to accelerate their goal of putting America’s energy jobs in the grave,” Sen. Kevin Cramer (R-ND) wrote.

The already struggling energy sector has faced a particularly rough few months as oil prices have dropped in the face of increased global supply and decreased demand.

But the pandemic has been hugely damaging to the U.S. economy overall. Unemployment is at its highest rate since the Great Depression and more than 33 million Americans have lost jobs since March. In the first quarter of 2020, the nation’s GDP fell 4.8% and experts expect that number to be much higher for April, May, and June.

“The decline in the second quarter is much bigger than the first quarter. We’re thinking it’s somewhere around 40%,” economist Paul Ashworth told Minnesota Public Radio’s “Marketplace” last month.

Published with permission of The American Independent Foundation.