Washington, D.C. — Instead of granting bailouts to oil companies, a new issue brief from the Center for American Progress offers three viable alternatives that would let Congress offer more direct help to the states, counties, and workers hit hardest by the oil bust.
The brief argues that oil companies were at the edge of a financial cliff long before the coronavirus crisis and that throwing taxpayer money at overleveraged oil companies would be a fiscally irresponsible move that hands over bailout dollars primarily to debtors, shareholders, and executives, rather than workers.
“Rather than offering another bailout to the volatile oil and gas industry, Congress should deliver immediate and direct help to the workers, communities, and states that are now paying the price for the industry’s financial recklessness over the past decade,” said Kate Kelly, director of Public Lands at CAP and co-author of the issue brief.
Congress should offer assistance that supports out-of-work oil and gas workers, bolsters state and county budgets, and ultimately helps states rebuild and diversify their economies in a way that is less dependent on fossil fuels. This assistance should include:
- The big buyout: The next stimulus should allow energy-producing states to opt in to a federal buyout of the estimated revenues from future oil and gas drilling on public lands over the next 10 years. This would give states a lump sum of money now and divorce their budgets from reliance on the volatile and unsustainable fossil fuel industry.
- Orphan well cleanup fund: Lawmakers should create a $2 billion orphan well cleanup fund to plug and reclaim dangerous and polluting abandoned wells. The fund could support 14,000 to 24,000 jobs in energy-producing states and would be available to federal, state, and tribal governments that have adequate bonding requirements in place.
- Gateway community dividends for counties: Congress should change the formula for the Payments in Lieu of Taxes (PILT) program that provides rural counties with funding for essential services to offset losses from tax-exempt public lands. The new formula would provide additional revenue to counties that protect public lands—especially rural counties with large percentages of public land.
Read the issue brief: “How Congress Can Help Energy States Weather the Oil Bust During the Coronavirus Pandemic” by Kate Kelly and Jenny Rowland-Shea.
To find the latest CAP resources on the coronavirus, visit our coronavirus resource page.
For more information or to talk to an expert, please contact Sam Hananel at [email protected] or 202-478-6327.