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US fossil fuel giants set for a coronavirus bailout bonanza

Updated: May 21, 2020

By: Fiona Harvey

Exclusive: oil, coal and fracking companies in line to benefit from $750bn bond scheme

American Electric Power’s Mitchell power plant in Moundsville, West Virginia. Photograph: Brian Snyder/Reuters

Fossil fuel companies and coal-powered utilities in the US are set for a potential bonanza under federal government plans for a bond bailout, part of the rescue package for the coronavirus crisis.

At least 90 fossil fuel companies, many of them established giants such as ExxonMobil, Chevron and Koch Industries, stand to gain from the Federal Reserve’s coronavirus bond buyback programme, alongside more than 150 utilities including coal-heavy firms such as American Electric Power and Duke Energy, according to a new analysis.

The bond buyback scheme is expected to be worth at least $750bn (£605bn) altogether and to benefit thousands of companies by the end of September, and the size of the payout that could go to fossil fuels and utilities is as yet unknown. The scheme is to be discussed in the US Senate on Tuesday.

Jason Disterhoft, a senior campaigner at Rainforest Action Network, which conducted the study, said public money should be used to bail out companies only with strict conditions attached. “Our concern is that these recovery funds should be prioritising people and communities and they are going instead to big companies to pay down their debts,” he said.

Ten out of the top 40 fracking companies would be eligible to apply, according to the analysis, which examined all US fossil fuel companies and energy utilities to check whether they would qualify under the published scheme rules. It is not known whether any of these companies will apply for the support, though many are expected to do so.

Established giants such as ExxonMobil, Chevron and Koch Industries stand to gain from the Federal Reserve’s coronavirus bond buyback programme. Photograph: Éric Piermont/AFP via Getty Images

The plunge in oil prices has thrown oil companies into disarray, while dropping energy use because of the crisis has also had an impact on coal-fired power plants and utilities.

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