Letter to Jerome Powell, Chair of the Federal Reserve - Senator Markey and Rep. Barragán Decry Requested Fed Bailout of Debt-Ridden Fossil Fuel Companies

Letter

Dear Chairman Powell,

On April 15, 2020, we were joined by 39 members of Congress in writing to express our
opposition to the proposed use of coronavirus response funds to bail out the fossil fuel industry.
After learning that the fossil fuel industry is lobbying for special treatment under the Federal
Reserve's Main Street Lending Program, we are following up to urge you to reject these calls to
change this program, which is intended for use by small- and medium-sized businesses that were
in good financial standing before the crisis hit. Specifically, fossil fuel producers are seeking
changes to the terms of the program that would allow them to use loan proceeds to pay off or
settle pre-coronavirus-pandemic loans and debts. It would be a short-sighted misuse of taxpayer
resources to accede to these requests, which would effectively help bail out an industry
struggling under the weight of its own debt and long-term systemic decline.

Fossil fuel investments are now riddled with fundamental structural risks. As countries around
the world respond to the climate crisis, deployment costs for renewable energy alternatives are
falling. This is causing unease among investors about the future value of fossil fuel assets,
leading to concerns about the long-term performance of fossil fuel industry stocks--fears that
have been borne out over the past decade as the energy sector has remained the worst-performing
sector on the S&P 500. Many notable financial institutions have already moved to restrict their
exposure to carbon-intensive investments, including BlackRock, Wells Fargo, the European
Investment Bank, and the World Bank Group. And these concerns have arisen despite one
giveaway after another from the federal government to the fossil fuel industry, with the Trump
administration rolling back key regulations such as fuel economy standards and keeping billions
of dollars in annual tax subsidies on the books.

Additionally, using federal money to prop up the fossil fuel industry would only increase the
financial toll of climate change and the environmental degradation it has wrought. Cities, states,
and the federal government are already bearing the costs of rising seas, flooding, heat waves, and
other environmental and public health disasters. The costs of inaction on climate change are already high, but continued investment in its root cause of fossil fuels will only drive those costs higher.

During the federal response to this unprecedented crisis, we urge you to deploy the Federal
Reserve's resources in a way that protects taxpayer interests and avoids the bailout of an industry
that has been struggling under its own short-sighted financial decisions for years. We must
protect workers and communities affected by the oversupply of fossil fuels and the resulting
downturn in oil and gas prices, but we can do that without carving out special rules for loans to
fossil fuel corporations. We strongly urge you to resist the fossil fuel industry's calls for
privileged treatment and maintain the existing terms of the Main Street Lending Program.

Sincerely,

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