The not so stealth oil and gas bailout now has a price tag - $744 billion. That’s how much toxic oil and gas debt exists. A mini 🧵 on the implications based on new @IEEFA_institute analysis ieefa.org/ieefa-commenta…
1st - the number that matters for the @federalreserve corporate bond buying program - $617 billion. @ieefa_institute says 83% of total oil and gas debt is eligible for the Fed program given their lax investment criteria. That means $617 billion in O&G debt is technically eligible
2nd number that matters - $500 billion. That’s the total scale of the @federalreserve corporate bond buying program. Which means oil and gas all by itself could use every available dollar and still want more. They’ll fight tooth & nail to divert $ from business & families in need
But as @ieefa_institute points out we shouldn’t call this a bailout - it’s a bonfire. Because the underlying economics of O&G are so precarious (negative prices 🤯) this money will be wasted. The companies will go bankrupt regardless. Bonfires, not bailouts is not good policy
So can we really afford to throw hundreds of billions of taxpayer dollars the @federalreserve is supposed to be managing with taxpayer risk in mind into the oil and gas dumpster fire when small businesses are going bankrupt every day?
Ultimately we don’t have enough 💰to temporarily bailout the oil and gas industry just to see them ultimately go bankrupt regardless. The CARES act was ~$2 trillion. The O&G industry * by itself * could devour 1/3 of that and come back for more in a few months. The jig is up.
