Fed Chair Powell's Policies Fuel Fossil Borrowing Binge
Aug 13, 2021
With Federal Reserve Chairman Jerome Powell’s first term ending in February next year, White House officials are considering Powell’s renomination and whether his actions align with Biden administration policy priorities.
When it comes to the Fed’s impact on the climate, new data suggest a clear answer: Powell’s policies have helped the biggest fossil fuel companies borrow more money more cheaply, propping them up to fight another day.
According to new data compiled by BailoutWatch:
114 fossil fuel companies have borrowed $177.7 billion from bond investors since March 2020, when the CARES Act established temporary Fed programs used by Powell to bail out bond markets
In the first three months of 2021 alone they borrowed nearly $40 billion — the fourth-biggest quarter ever for fossil bonds — showing Fed programs’ impacts linger even after they were wound down
The biggest borrower was Chevron Corp, which issued $17.7 billion in new bonds. During the same period, Chevron acquired Noble Energy in an all-stock deal worth more than $4 billion
Exxon, BP, Occidental and MPLX each issued at least $6 billion in bonds
Oil and gas companies have used their new, Fed-supported financing to acquire competitors, expand production, and refinance out of higher-interest debt that had limited their profits. The money extends their ability to continue business as usual for a few years longer and contributes to increased oil extraction, despite clear evidence the industry is in long-term decline.
https://bailoutwatch.org/analysis/fed-chair-powells-policies-fuel-fossil-borrowing-binge?utm_content=176375362&utm_medium=social&utm_source=twitter&hss_channel=tw-456864723