The Marathon Petroleum Corp refinery in Carson, California on April 25.

The Marathon Petroleum Corp refinery in Carson, California on April 25. Robyn Beck / AFP via Getty Images

In Pandemic Recovery Efforts, Polluting Industries Are Winning Big

Oil and gas giants, mining interests, and coal-fired power plants have all received financial and regulatory relief as governments around the world enact pandemic recovery plans. These moves threaten to create a dirty, high-carbon legacy that long outlasts the current crisis.

While the world has been preoccupied by the Covid-19 pandemic, polluting industries have been pushing to turn the crisis to their advantage, lobbying governments — often successfully — for lucrative favors like bailout funds and the easing of costly regulations.

Industries such as oil and gas, coal, aviation, and auto-manufacturing describe the giveaways as necessary to ease the pandemic’s economic pain, but experts say the changes often align with companies’ long-standing agendas of weakening existing environmental rules and taxes, and opposing new ones. And, collectively, the moves threaten to create a dirty, high-carbon legacy that long outlasts the current crisis — one that stands in sharp contrast to the widely noted, but short-lived, dips in greenhouse gas emissions and air pollution that resulted from lockdowns.

Oil and gas interests, which have long viewed climate and other environmental policies as a potentially existential threat, have been especially quick to adapt their expansive lobbying work to the new circumstances, says Edward Collins, director for corporate lobbying research at InfluenceMap, a London-based nonprofit that monitors corporate influence on climate policy. In the United States, those efforts have been rewarded with access to billions of dollars in public pandemic recovery funds, in the form of tax breaks, loans, and waivers of the fees normally charged for extracting resources on public lands.

“These are economy-defining amounts of money,” Collins said. “They’ll really shape the next five, maybe 10 years.”

The bonanza has been particularly rich in the U.S., but polluters worldwide are also racking up wins.

Fossil fuel companies “are ready for these moments” of crisis, he said. “They’ve got a huge amount of capacity in place to try to control the pace and nature of regulation, because they see it as absolutely critical. So when an opportunity like this presents itself — or a risk, whichever way they see it — they’re not going to let that go.”

Other industries are reaping gains, too. Since Covid-19 hit, U.S. officials have finalized or advanced proposals to ease restrictions on logging, grazing, pipeline safety, and the disposal of some radioactive waste, among a blizzard of other changes.

And while the bonanza has been particularly rich in the United States, polluters worldwide have also been racking up wins. Coal is getting a government-sponsored boost in China and South Korea. Brazil — whose top environment official was caught on video describing the pandemic as a good time to push through regulatory changes — is looking the other way while illegal loggers, miners, and ranchers step up their aggressive exploitation of the Amazon rainforest.

With decisions being made at warp speed and many meetings held remotely, transparency has been an early casualty. “There’s less opportunity for oversight, and less opportunity for public input than you’d see in normal times,” Collins said. “Considering the amounts of money and the amounts of regulatory intervention on the table,” he said, that is deeply worrying.

EPA Administrator Andrew Wheeler at a Senate hearing on May 20 at which he was questioned about easing enforcement during the Covid-19 pandemic.

EPA Administrator Andrew Wheeler at a Senate hearing on May 20 at which he was questioned about easing enforcement during the Covid-19 pandemic. Al Drago-Pool / Getty Images

In Washington, oil and gas companies are aggressively raking in pandemic relief funds, even though their troubles predate the crisis, said Lukas Ross, senior policy analyst at the advocacy group Friends of the Earth, who has authored two reports on those efforts. “They’re trying to convince anyone who will listen that their troubles began in the middle of March, when the reality is structural decline,” most notably in fracking firms that have been in dire straits in recent years as a glut of natural gas has driven down the price and forced widespread bankruptcies. Big companies such as ExxonMobil and Chevron also have been living beyond their means, he said, shelling out billions more in dividends and share buybacks than they bring in.

The Federal Reserve’s $600 billion Main Street Lending Program, ostensibly for small- and medium-sized businesses that were in good shape before Covid-19, bears signs of the oil industry’s influence, with changes “making it easier for bigger, more heavily indebted companies to get these loans, courtesy of the taxpayer,” Ross said. Lobbyists are also pushing for advantageous changes to the Fed’s corporate bond-buying program, he added. “We are really in Act One of how these funds get deployed.”

Taxes have been a big focus, too. While U.S. oil and gas companies profited handsomely from the 2017 corporate tax cuts, decisions on deductions for interest and losses went against them then. The $2 trillion CARES Act pandemic relief package reversed both of those decisions, allowing more extensive deductions, at least temporarily, and authorizing immediate refunds. “It’s a means of injecting them directly with cash through changes to the tax code,” Ross said. Bloomberg News estimates at least 37 oil companies are so far claiming $1.9 billion.

The American Petroleum Institute, which represents oil and gas companies, emphasizes that the tax and loan terms apply to all sectors, and says fossil fuel firms have not sought special favors. “Our efforts have been focused on ensuring our member companies have the same access as other industries to economy-wide programs,” said Scott Lauermann, a spokesman for the group.

The Trump administration is using the pandemic to advance its anti-regulatory agenda.

Another lucrative area is royalty relief, with officials granting breaks on fees companies pay to drill and mine on public lands. The federal Bureau of Land Management has temporarily reduced royalties on more than 75 Utah leases, some to as little as 2.5 percent of the oil’s value, from the standard 12.5 percent. It also has suspended rent payment for drilling leases in Wyoming — while imposing rent retroactively on wind and solar operations. All told, Ross said, “these are a lot of potential levers” to keep oil and gas flowing, with dangerous consequences for the climate.

Meanwhile, the Trump administration has been using the pandemic as a rationale for advancing its anti-regulatory agenda. Among many other moves, it has all but suspended enforcement of air and water pollution rules; revised Clean Water Act rules to make it harder for states to block energy projects; and waived Endangered Species Act and other requirements for environmental review on new mines, pipelines, highways, and other infrastructure.

“It just really ramped up” in early March, said Amy Westervelt, a journalist and host of the podcast Drilled, who has been tracking the giveaways. “Pipeline projects that had been super-controversial were getting rapid-fire permits,” and other long-standing plans were fast-tracked. “It was so many things, all the time. That was shocking to me — just the volume.” The more than 80 developments she has cataloged include a scaling back of pipeline safety rules, as well as approvals for an 800-mile gas pipeline on Alaska’s North Slope and a drilling project at the Carrizo Plain National Monument, a California grassland.

Among those looking for a pandemic boost is the plastics industry, which has been seeking suspension or reversal of local and state bans on single-use plastics, including bags. So far, all the bag law suspensions are temporary, said Jennie Romer, legal associate at the Surfrider Foundation’s Plastic Pollution Initiative. “But we know the plastics industry has been working hard” for permanent reversals, she said. California suspended its bag ban for 60 days, while Maine, Oregon, and New York have postponed the start of theirs.

Of course, governmental largesse toward polluting companies is not confined to the United States. Despite its plans for a Green New Deal — and a pledge to end public financing for coal — South Korea this spring authorized $2 billion in emergency loans for a big coal power construction company, a move analysts say could enable it to continue building new plants across South and Southeast Asia.

In China, there is political backing for expanding coal-fired power again.

Even more worrying, provincial officials in China, desperate for the jobs that come with any new construction, are issuing permits for a surge of new coal generation, said Lauri Myllyvirta, lead analyst at the Helsinki-based Center for Research on Energy and Clean Air. At the start of the year, about 100 gigawatts (GW) of coal capacity — roughly 190 plants — were under construction in China. By the end of May, officials had announced or issued permits for about 40 GW in additional plants, a dramatic acceleration from last year, he said. In March alone, officials gave out permits for more coal-fired plants than in all of 2019.

“There’s been a big uptick,“ Myllyvirta said. “It signals that there is political backing for expanding coal-fired power again,” after a shift away from it, although he sees some signs national officials may be urging provinces to hit the brakes.

Climate-endangering activity also has picked up elsewhere. In Brazil, President Jair Bolsonaro has relentlessly pushed for greater commercial exploitation of the Amazon, and as the virus pummels Brazilians, his government has looked the other way while illegal loggers, ranchers, and miners clear even more land, said Ane Alencar, director of science at IPAM Amazônia, a research group. In May, a video emerged of the country’s environment minister describing the pandemic as an opportunity to “push through and change all the rules,” while the media “are only talking about Covid.”

Satellite images show nearly 15,000 acres of new deforestation between January and May in the Brazilian state of Pará.

Satellite images show nearly 15,000 acres of new deforestation between January and May in the Brazilian state of Pará. Monitoring of the Andean Amazon Project (MAAP)

The message to those seeking profit in the Amazon is clear, Alencar said: “The government doesn’t want to fight illegality.” Amazon deforestation has accelerated sharply, jumping by 55 percent in the first four months of the year, as compared to 2019, when it was at an 11-year high, the country’s National Institute for Space Research reported.

In Europe, where the Green Deal carbon-cutting program has been the biggest target of lobbyists, the results of their aggressive press are not yet clear, said Margarida Silva, a researcher at Corporate Europe Observatory, which tracks business influence on EU decisions. Polluting industries “very quickly redirected their lobbying, and reframed it under the corona perspective,” she said. There, too, the changes they urge are largely the same as those they wanted before, but now “they are able to say ‘Because of the pandemic we need X,’ or ‘We need Y.’”

The specifics vary by sector, she said, but mostly boil down to opposing or urging delays in new environmental rules or taxes, and seeking a weakening of existing regulations. Airlines have pushed back against the hint of jet fuel taxes. Agricultural interests sought delays in Farm to Fork, the Green Deal initiative covering food sustainability. So far, European lobbyists have met with much less success than their U.S. counterparts, Silva said, but they may yet score wins as proposals advance and the European Union moves forward with its €750 billion recovery package.

Whether Covid-19 ultimately helps set the world on a high-carbon path or a cleaner one depends on the choices leaders make now, Myllyvirta said. With so many sectors looking for bailouts and other help, who gets them, and with what strings attached, “will have a major impact on the entire economic order.” At a moment when so much is up in the air, he said, “the only given is that [the] crisis will change trends and trajectories.”