Energy Secretary accuses banks of ‘turning around’ oil and gas industry
Energy Secretary Dan Brouillette accuses major US banks discriminate against the oil and gas industry, likening their refusal to fund arctic drilling projects to tactics used to prevent minorities from buying homes.
In one interview with Axios published on MondayBrouillette accused some of the biggest banks of “wiping out” the oil and gas industry by refusing to fund new drilling in parts of northeast Alaska.
Goldman Sachs, JPMorgan Chase, Wells Fargo, Citibank and Morgan Stanley – five of the eight largest US banks – said they not providing loans or credit that support oil and gas drilling in the Arctic National Wildlife Refuge. The 2017 tax cut law lifted a decades-long ban on drilling in the region, drawing praise from the fossil fuel industry and criticism from Democrats and environmentalists.
Brouillette said the measures taken by the big banks were similar to systemic discrimination the financial sector faced by non-white families throughout U.S. history.
“We didn’t want the banks to bring parts of the country online. We don’t want that here. I don’t think banks should cut back on our oil and gas investments across the country, ”said Brouillette, former vice president of financial services firm USAA.
Throughout the 20th century, banks often refused to grant home loans and other credit products to applicants in majority minority areas, typically drawing red lines on maps around neighborhoods under the discriminatory assumption that they were too risky to serve.
The practice, known as redlining, is now illegal, but it has prevented millions of non-white families from fully benefiting from the post-World War II economic boom and the federal government’s support for accession to the United States. property. Experts say redlining reinforced segregation long after it was ruled illegal and created a glaring racial wealth gap that continues to widen.
Although it is illegal for banks to reject customers based on their race, ethnicity, or gender, financial companies have wide legal latitude in choosing the industries they serve. Despite this, Brouillette accused the banks of discriminating against oil and gas producers as the industry grapples with a crisis brought on by low energy demand and high levels of pre-existing debt.
Brouillette said in April he would work with the Treasury secretary Steven mnuchinSteven MnuchinMenendez and Rubio Ask Yellen to Investigate JBS Meat Packer The Hill’s Morning Report – Brought to you by Goldman Sachs – Biden rallies Senate MPs behind massive spending plan Mnuchin dodges CNBC questions about knowing if Trump is lying about the election MORE to ensure banks and lenders don’t make “discriminatory decisions” against oil and gas companies when granting coronavirus relief loans. He also told Bloomberg TV last week that he had asked the Federal Reserve to extend the terms of a emergency loan program for small businesses to cover oil and gas companies that had too much debt to initially qualify.
“This is, incredibly, not the first time that he has compared the avoidance of a financially precarious company to discrimination,” he added. Graham Steele tweeted, former Democratic Chief Advisor to the Senate Banking Committee.
Energy Department spokeswoman Shaylyn Hynes said in a statement that Brouillette “has zero tolerance for discrimination of any kind, and in no way equates the plight of communities. minority to that of energy companies “.
“What he has done is forcefully argue that historically some members of the financial services industry have experienced discrimination, a custom that he and many others have worked hard to eradicate and continue to do. ‘oppose,’ Hynes added.
Brouillette is among several Republicans, including Trump, who have accused banks of discriminatory conduct against the oil and gas industry.
After the senator Dan SullivanDaniel Scott Sullivan The 19 GOP Senators Who Voted For Infrastructure Bill T The Hill’s Morning Report – Brought to you by AT&T – Final countdown: Senate draws closer to final vote on infrastructure Senate votes to put end of debate on the T PLUS infrastructure bill (R-Alaska) said in an Oval Office event last month that “starting to discriminate against US energy companies,” Trump replied that he liked “the idea of looking at this.”
“They are afraid of the radical left. You shouldn’t be afraid of the radical left,” Trump added. “You cannot discriminate against these big energy companies.”
Sullivan and nearly 40 other GOP lawmakers wrote a letter to the White House in May urging the Trump administration to “use all administrative and regulatory tools at your disposal to prevent US financial institutions from discriminating against the US energy sector while simultaneously enjoying the benefits of the federal government. government programs.
Banks are under increasing pressure from environmental activists and democratic lawmakers withdraw their support for oil and drilling projects amid the growing toll of climate change. The precarious financial situation of the industry has also put off some banks and investors, communities at risk who depend on oil and gas production to support their local economies.