Fracking Firms Fail, Rewarding Executives and Raising Climate Fears
Source credit: An infrared image last year of an MDC Energy well pad leaking methane (which is invisible to the naked eye). This month, the site has continued to leak gases, government violations show. Credit...Jonah M. Kessel/The New York Times
Hiroko Tabuchi reports in Newyork Times that hundreds of oil and gas companies are going bankrupt while leaving an environmental disaster behind by leaving wells leaking planet-warming pollutants, with cleanup costs left to taxpayers.
At the same time, these companies are paying millions of dollars in bonuses, consulting fees and other perks to top executives just before filing for bankruptcy.
"Whiting Petroleum, a major shale driller in North Dakota that sought bankruptcy protection in April, approved almost $15 million in cash bonuses for its top executives six days before its bankruptcy filing. Chesapeake Energy, a shale pioneer, declared bankruptcy last month, just weeks after it paid $25 million in bonuses to a group of executives. And Diamond Offshore Drilling secured a $9.7 million tax refund under the Covid-19 stimulus bill Congress passed in March, before filing to reorganize in bankruptcy court the next month. Then it won approval from a bankruptcy judge to pay its executives the same amount, as cash incentives."
“It seems outrageous that these executives pay themselves before filing for bankruptcy,” said Kathy Hipple, an analyst at the Institute for Energy Economics and Financial Analysis and a finance professor at Bard College. “These are the same managers who ran these companies into bankruptcy to begin with,” she said.
Preliminary estimates this year by researchers examining the immense oil fields of Texas and New Mexico suggest a substantial increase in methane concentrations in March and April of 2020 compared with a year earlier, said Claus Zehner of the European Space Agency.
“Our explanation is that due to less gas demand, and companies even going bankrupt, there’s less maintenance,” Dr. Zehner said. “And there’s more uncontrolled flaring and even more venting,” he added, referring to the intentional burning of methane atop towering flares, and the release of methane straight into the atmosphere.
One reader left this interesting comment: "Without a doubt we are heading for a catastrophe. Not to worry though. The planet will divest itself of the environmentally destructive human race and it will march on without us. Count on it."
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