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COVID-19 Relief Proposals: Bail Out States, Workers – Not Oil Companies

An orphaned oil well cleanup fund could put employees of the fossil fuel industry back to work, mitigating the environmental damage at abandoned well sites. (tristanbnz/Adobe Stock)
An orphaned oil well cleanup fund could put employees of the fossil fuel industry back to work, mitigating the environmental damage at abandoned well sites. (tristanbnz/Adobe Stock)
May 26, 2020

HELENA, Mont. -- The Trump administration and Congress are considering relief for the fossil fuel industry, which has been hit hard by low demand during the coronavirus pandemic.

But one progressive group says the federal government should bail out the states that are dependent on energy production, not oil and gas companies.

Kate Kelly, director of public lands for the Center for American Progress (CAP), says one way to do this would be an orphaned oil well cleanup fund.

"Which will allow states to address the legacy of pollution from oil and gas development on state, private and public lands, but it will also put oil and gas workers back to work in high-paying jobs," she states.

The Interstate Oil and Gas Compact Commission, which represents Montana and 30 other states, has also endorsed this idea. Kelly says decaying wells can leak methane gas, a potential health hazard for humans and wildlife. There are about 230 abandoned wells in Montana.

States receive about half of the royalties from oil and gas development on public lands within their borders. That money boosts state coffers in good times, but has taken a hit with COVID-19.

The Center for American Progress says Congress' next stimulus bill should include a buyout program to make up for the shortfall in states' budgets and infuse them with cash immediately.

Kelly says states could take the opportunity to move away from dependence on oil revenue as well.

"It allows state governments to get money now, and it also allows state governments to divorce their budgets from a volatile energy industry that will see boom-and-bust cycles for the foreseeable future," she points out.

Kelly says under a Center for American Progress proposal, Montana could opt for $174 million now in exchange for revenue from resource development on public lands over the next decade, which would go to the federal government.

Kelly says the fossil fuel industry was running into trouble before the pandemic, and thinks bailouts for the industry could be propping up companies already in dire straits.

"These funds will benefit debtors and CEOs before they actually benefit workers on the ground and companies that are fiscally solvent," she states.

Eric Tegethoff, Public News Service - MT