(Spencer Platt/Getty Images)
By Sanchali Singh
(WASHINGTON) An analysis published Friday revealed that fossil fuel companies in 2020 cut almost 60,000 jobs in the U.S. but still pocketed $8.2 billion in tax bailout from the federal government.
Bailout Watch, a nonprofit organization that uses publicly available data to examine how fossil fuel companies are supported by the government, found that 77 firms received billions of dollars through the CARES stimulus package passed by Congress last year.
The organization in its analysis found that fired employees had to stretch “the $1,200 checks they received under the same law.”
Bailout Watch said the data “underscore the hypocrisy of claims that fossil fuels are a necessary engine of employment and succeed on an equal playing field in the free market.”
The analysis revealed that companies primarily involved in oil, gas and coal cut payrolls for a net 58,030 jobs at 74 companies that reported employee headcounts for the end of 2019 and 2020.
Data also showed that 62 companies that fired employees collected $7.65 billion through tax bailout — about $131,000 for each of the 58,488 people they left jobless.
Five companies also filed for bankruptcy protection after receiving over $300 million in tax bailouts and laying off a total of 5,683 workers.
“The bailouts are the tip of a much bigger iceberg: fossil fuels have long benefited from a trove of tax-code provisions,” Bailout Watch said in a statement. “In the century since they emerged, the coal, oil and gas industries’ strength has reflected not market efficiencies, as defenders claim, but government largesse that far exceeds what has so far been extended to the clean energy sector.”
The organization cited data for specific companies in its analysis and listed the following findings from a few analyzed companies:
- Marathon Petroleum laid off 1,920 workers, about 9% of its workforce, after receiving tax breaks totalling $2.1 billion — about $1.1 million for every job eliminated
- Devon Energy laid off 22% of its staff after receiving a $143 million tax windfall — $357,500 for each worker laid off.
- National Oilwell Varco slashed payrolls by 22% after receiving a $591 million tax benefit
- Occidental Petroleum eliminated 2,600 jobs, 18% of its 2019 workforce, and collected a $195 million tax bailout — $75,000 in free money per job eliminated
In his $2 trillion American Jobs Plan proposal, President Joe Biden on Wednesday proposed eliminating tax preferences for fossil fuels and making polluting industries pay for their messes.
The infrastructure proposal acknowledges that the current tax code “includes billions of dollars in subsidies, loopholes and special foreign tax credits for the fossil fuel industry.”
Biden’s tax reform, which aligns with his commitment to put the country on a path to net-zero emissions by 2050, proposes elimination for “all these special preferences.”
In response, top oil lobbyist Frank Macchiarola of the American Petroleum Institute on Twitter said the president’s proposal would “jeopardize good-paying jobs,” claiming that the fossil fuel industry “receives no special tax treatment” and supports “a level playing field for all economic sectors.”
Bailout Watch also found that some companies’ coronavirus bailouts extended beyond tax benefits. Analysis showed that at least seven companies took a collective $37.7 million from the Small Business Administration’s Paycheck Protection Program, which designates money to keep people employed.
“Yet six of them laid off a total of 335 workers, averaging one layoff for every $247,000 they received from the two tax programs,” Bailout Watch said.