As Nevada’s taxpayers start to receive our second round of stimulus checks, a new report shows that the outgoing administration has handed out billions of dollars to oil and gas companies in the form of relief payments, tax breaks and debt forgiveness.
An analysis by Bailout Watch, Public Citizen and Friends of the Earth reveals that under President Donald Trump and the previous Congress, the fossil fuel industry received between $10.4 billion and $15.2 billion in direct economic relief from federal efforts. Why is the federal government fighting over providing direct aid for American taxpayers while handing out billions of dollars to a declining industry?
The oil and gas industry was on a steady decline well before the pandemic started, yet 26,000 energy companies were able to utilize the Small Business Administration’s Paycheck Protection Program (PPP), which enabled companies to keep workers on their payroll. Since 2000, oil companies Valero and Marathon have taken $922 million and $500 million, respectively, in local, state and federal subsidies — long before the pandemic began.
With the recent government benefit handouts, five major fossil fuel companies including Diamondback Energy, EOG Resources, Marathon Petroleum, Phillips 66 and Valero enjoyed the biggest cumulative government benefits, banking more than 10% of the $110 billion in direct benefits.
In addition to the direct financial aid these large companies received, the government has allowed them to double and triple dip by offering them tax refunds, forgivable loans and allowing them to pay less to develop on public lands. When you put these multipronged aids together, the picture is clear: The Trump administration, abetted by Congress, has artificially prolonged the industry’s decline and postponed our inevitable transition to clean energy sources.
Being that Nevada is primed to be one of the leading states in the country for renewable energy development — and that we lack any significant oil and gas reserves — we cannot afford to have our tax dollars used to prop up a failing industry that offers our state so little in return.
It’s not only the bailout of the oil and gas industry that’s frustrating to witness; it’s also the way oil and gas leasing of our public lands further cheats Nevadans. Last year, the Bureau of Land Management office in our state offered 13 parcels of land for oil and gas development — parcels that included critical wildlife habitat and migration corridors. Of these, nine were sold at the minimum bid of $2 per acre. Many of these parcels will not see any development due to the low potential of them containing oil or gas. Yet leasing these lands at such low rates allows the federal government to prioritize extractive energy development over wildlife protection and our outdoor recreation economy.
Now more than ever, public lands need to be managed for multiple uses that include responsible energy development and recreation havens, but also ensure that wildlife have the best available habitat and safe corridors. The Bureau of Land Management’s mandate is “to manage, protect and improve these lands in a manner to serve the needs of the American people.” Its mission is not to provide the oil and gas industry with first “dibs” on our land or hand them artificially cheap access to tear up land that Nevadans and wildlife cherish.
To add salt to the taxpayers’ wound, the companies that fruitlessly attempt to extract oil and gas from Nevada’s soil receive yet another perk. According to Taxpayers for Common Sense, “oil and gas companies that operate in Nevada enjoy paying royalty rates on taxpayer-owned lands that are below the rates state and private landowners charge. If the onshore royalty rate had been set at 18.75%, in parity with offshore oil and gas, onshore production could have generated up to $12.4 billion in additional royalty revenue from 2010 to 2019 throughout the United States.”
Across America, taxpayers have lost more than $12.4 billion from 2009-19 as a result of the broken oil and gas leasing system. Bailout Watch has shared that, “An audit by the Government Accountability Office found the program cost the government a minimum of $4.5 million in lost revenue.”
The time has come to update these outdated rules and stop using taxpayer money to prop up oil and gas companies that give them an unnecessary advantage over renewable energy projects. Nevada would better benefit by creating renewable energy opportunities that will provide jobs, economic growth and responsible energy development in our state for decades to come.
Fortunately for Nevadans, our U.S. senators agree. We are grateful to Sen. Catherine Cortez Masto, D-Nev., for her introduction last year of several bills that help address our current crisis around oil and gas leasing on public lands, including the Ruby Mountains Protection Act and the End Speculative Oil and Gas Leasing Act.
Now that a new Congress has been sworn in and with a new administration on the horizon, we look forward to working with Cortez Masto to re-introduce these bills and to stop handing over land and taxpayer dollars to oil and gas companies from out of state. We thank both Cortez Masto and Sen. Jacky Rosen, D-Nev., for pursuing renewable energy development on public lands and advancing Nevada’s clean energy future.
Russell Kuhlman is the executive director of the Nevada Wildlife Federation.