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Trump is considering a fossil fuel bailout, amid coronavirus worries

March 10, 2020
A drilling rig in Wamsutter, Wyoming.
A drilling rig in Wamsutter, Wyoming.Courtesy: BP

The Trump administration is “strongly considering” pushing a bailout package for US oil and natural-gas companies, as plummeting fuel prices and the coronavirus outbreak hammer the industry, the Washington Post reported on Tuesday.

The details: The aid would likely take the form of low-interest government loans to shale drillers, the newspaper reported, citing sources familiar with the White House discussions. That would throw a lifeline to a heavily indebted industry with increasingly limited access to private capital. Analysts say this week’s historic plunge in oil prices, if sustained, could force major US players into a battle for survival.

Criticisms: The proposal was quickly criticized by climate and energy observers. They argue that federal aid for the energy sector should go toward clean technologies that could help combat climate risks, rather than propping up fossil-fuel companies.

Republican support for the idea would stand in sharp contrast to conservative criticisms of the Obama administration's efforts to support renewables companies in the wake of the 2008 financial crisis.

In related news: The oil and gas proposal follows President Trump’s announcement Monday that the administration would work to support other sectors rocked by the escalating public health crisis, including airlines, cruise ships, and hotels. It also comes at the same time that an effort to pass a bipartisan climate and clean energy bill seems to be unraveling.

Questionable priorities: The administration has moved rapidly to aid businesses despite a lackadaisical response to the spread of the virus itself. After early warnings from the devastating outbreak in China, the federal government largely failed to prepare for the coming crisis, health experts say. Among other issues, the US is way behind other nations in testing. Trump himself has consistently downplayed the risks and spread erroneous advice and information.

This story is part of our ongoing coverage of the coronavirus/Covid-19 outbreak. You can also sign up to our dedicated newsletter.

 

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