The federal emergency fund is managed by the Small Business Administration and was designed by Congress as a lifeline to small businesses struggling to keep workers on the books with lockdown orders and lost revenue during the viral outbreak. As long as a company meets certain requirements, including spending at least 75 percent of the loan on wages and benefits, the entire loan is eligible to be forgiven.
But the program has been criticized for running out of money after disbursing funds to publicly traded companies before many mom-and-pop businesses could get a piece of it. Receipients include a slew of oil, coal and wind companies with cash flows in the tens of millions.
“This administration continues to give Paycheck Protection Program funds to large, well-connected corporations, rather than the small businesses the program was created to help,” said Kyle Herrig, head of the government watchdog group Accountable.US.
“Like many in our industry, large and small, SAE is facing an unprecedented challenge,” SAE said in a statement. “We accessed the lifeline authorized by Congress and the administration to help businesses affected by COVID-19 and the oil price drop.”
As of December, the company had 981 employees, including 385 in the United States, though the company said it has “undertaken reductions in force since the end of 2019.” The usual threshold for qualifying as a small business is having 500 employees or fewer.
Months before getting the federal loan, executives at the seismic testing firm caught the attention of federal investigators for alleged financial misstatements.
In August, SAE fired its chief financial officer and placed its CEO, Jeff Hastings, on leave after the SEC launched an investigation into the firm for allegedly providing misleading financial statements to investors.
Six months later, an internal investigation by the board of directors revealed the company paid approximately $12 million to a vendor created by the former CFO, Brent Whiteley, with about $6.1 million of that sum transferred directly to Whiteley, Hastings and entities formed or controlled by them.
The investigation also found Whiteley misappropriated another $4.1 million in funds between 2012 and 2019. In February, SAE admitted that its previous filings with the SEC dating back to 2014 are not reliable.
As of May, according to company filings, both the Justice Department and the Alaska Department of Revenue are also running their own investigations into the company.
“We are unable to comment on any ongoing investigations,” SAE said in a statement, adding “we have removed and replaced our entire senior executive team."
SBA spokeswoman Carol Wilkerson said the agency “does not comment on individual loans.”
But the oil services company is perhaps best known for wanting to search for oil in the Alaskan Arctic.
In 2018, SAE applied with two Alaska Native corporations to do extensive seismic testing in the 1.6 million-acre coastal plain of Arctic National Wildlife Refuge, the first step toward drilling in the pristine wilderness.
The consortium had drawn up plans for two teams of 150 workers to operate special vehicles that emit vibrations similar to dynamite explosions underground in search for oil or gas reserves.
Despite getting an expedited environmental review by the Trump administration, SAE’s plan was hamstrung in part by concerns from the U.S. Fish and Wildlife Service, which found its seismic application “not adequate” after it failed to take into account how the seismic work may disturb wildlife, including denning polar bears.
The SAE has not updated its application “so the project is still on hold," said Lesli Ellis-Wouters, a spokeswoman for the Bureau of Land Management, which oversees oil and gas resources in the coastal plain.
President Trump and the GOP-led Congress opened the refuge to oil and gas development in a 2017 tax bill, over the opposition of several environmental and tribal groups in Alaska seeking to preserve the area as habitat for caribou, migratory birds and other animals. But the Trump administration is running out of time to hold its first lease sale in the refuge before the end of the president’s first term in office.
Former vice president Joe Biden, the presumptive Democratic nominee, may stymie efforts to drill in the refuge should he beat Trump in November. As a senator, Biden voted to ban drilling in the refuge in 2005.
SAE is not the only oil company to get a paycheck loan.
The precipitous decline in demand during the pandemic has hit the already ailing energy sector hard. And a total of $221 million has gone to at least 21 publicly traded energy companies, my colleague Will Englund calculates.
“Of the 21 companies surveyed, one has seen its stock price go up over the past year,” Englund writes.
“The other 20 firms saw their stock prices decline by an average of 47 percent from last year’s high to the eve of the pandemic crash,” he continues. “During that same period, ending Feb. 23, the Dow Jones average climbed nearly 20 percent.”
Global warming watch
Emissions around the globe dropped 17 percent as the pandemic forced people to stop driving, flying, and producing at factories.
The lowered activity led to a decline of more than a billion tons of carbon dioxide emissions, with a peak drop in daily emissions of 17 percent in early April, according to a study published in the journal Nature Climate Change.
“Scientists have long insisted that the world must drastically scale back carbon pollution — and quickly — to mitigate the worst impacts of climate change over coming decades, although none have suggested that a deadly global pandemic is the way to accomplish it,” Chris Mooney, Brady Dennis and John Muyskens report. “Tuesday’s study projects that total emissions for 2020 will likely fall between 4 and 7 percent compared to the prior year — an unheard-of drop in normal times, but considerably less dramatic than the decline during the first few months of the year when economies screeched to a halt.”
How much emissions end up falling at the end of the year depends on how quickly people around the world start to resume ordinary life.
Surface transportation led the way with the most dramatic emissions drop:
But one study author warned: “History suggests this will be a blip.”
Scientists say the drivers of global warming are expected to bounce back as economies reopen. “Already, demand for energy is resuming as people return to the roads and many U.S. states begin easing stay-at-home orders that helped drive the price per gallon of gasoline to less than $1 at some pumps,” The Post team writes.
Americans are still worried about the climate crisis, even as the pandemic rages on.
A new national survey shows that Americans are acknowledging the reality of the warming planet at record levels, the New York Times reports. The report from researchers at Yale and George Mason universities found 73 percent of surveyed Americans said climate change was happening. It found a record high of 54 percent said they are “extremely” or “very” certain that climate change is happening. And 62 percent said the warming is human-driven.
“The findings are somewhat surprising because of a hypothesis in psychology called the ‘finite pool of worry,’ which suggests that when people’s level of concern about one issue rises, concern about others tends to fall,” NYT adds. “Many social scientists have pointed to a drop in Americans’ level of acceptance of climate science that occurred during the Great Recession, which began in the late 2000s, as evidence supporting the theory.”
Two dams fail in Michigan after days of heavy downpours in parts of the Midwest.
"Michigan Gov. Gretchen Whitmer declared a state of emergency for one county after two dams failed in the area -- following heavy rains and flash floods across the state," CNN reports. “Both the Edenville and Sanford Dams breached Tuesday night, the governor said in a news release, and urged residents to evacuate the affected areas in Midland County immediately.”
Chicago, meanwhile, has broken a May rainfall record yet again.
It’s the third year in a row that the city has seen historic May rainfall, Matthew Cappucci reports. “At least 8.37 inches of rain has come down so far this month and, with a third of the month still to go, that tally is expected to grow,” he writes. “ … Each of the past three Mays have seen more than double Chicago’s average May precipitation of 3.7 inches. This May, almost all of the rain has come in just four days.”
Trump officials ignored warnings that their rollback of a major Obama-era climate rule was flawed.
Documents shared with The Post “reveal that Environmental Protection Agency career staffers were sidelined as they warned that the revised standards had several defects,” Juliet Eilperin and Brady Dennis report.
Days before the rule was signed by EPA Administrator Andrew Wheeler, the top agency official in charge of setting fuel economy standards wrote an email saying the Transportation Department had not addressed more than 250 comments by EPA experts.
“Factually inaccurate text has still not been corrected in numerous places,” Bill Charmley wrote in a March 26 email to his superiors.
Details of these objections could create legal problems for the administration’s Safer Affordable Fuel-Efficient Vehicles rule, which replaces Obama-administration standards that would have improved average fuel efficiency by 5 percent a year between model years 2021 and 2026. Wheeler is set to testify before the Senate Wednesday.
An environmental group is calling on the energy secretary to resign after he said banks were “redlining” oil and gas companies.
The League of Conservation Voters said Energy Secretary Dan Brouillette should step down after remarks in an interview with Axios comparing some banks’ decision not to finance oil and gas development in the Arctic to redlining.
“Trump Energy Secretary Brouillette should step down immediately for his offensive comments that completely dismiss the experience black communities had and have with discriminatory lending practices,” LCV President Gene Karpinski said in a statement.
“The racist practice of redlining contributed to inequities, including environmental racism, that continue to plague the health and well-being of communities of color today,” he added. “Our Department of Energy should be focused on ensuring all people can live in clean, safe, and healthy communities right now, not using ignorant language to bail out Big Oil.”
Louisiana — which relies heavily on both its tourism and energy industry — has been hit hard by the pandemic.
Mark Zandi, chief economist for Moody's Analytics, called the pandemic “a two-black-swan event” for the state.
Beyond its collapsing restaurant scene, the “oil money that lubricates the region's economy is drying up, too,” David Montgomery and Richard A. Webster report. “With crude now scarcely $30 per barrel — break-even for an oil company is at least high $30s — half the companies surveyed this month by the Louisiana Oil & Gas Association said bankruptcy is likely.”
Electric vehicle adoption will accelerate in some places because of the pandemic.
A boost is expected in China, Europe and other countries for electric vehicles, Bloomberg News reports, as those regions commit to “sparking battery power via financial stimulus and infrastructure spending," according to a forecast from BloombergNEF.
“In the U.S., however, electric vehicle sales will slow drastically in the coming months as policy support weakens and cash-strapped automakers refocus on their most profitable products, namely gas-burning trucks and SUVs,” the report adds.
In other news
Johnson & Johnson will wind down sales of its talc-based baby powder in North America.
The decision follows the company’s efforts to defend the product for decades, even as it faced thousands of legal challenges from consumers who say the product caused cancer, the New York Times reports.
“Johnson & Johnson has often said that faulty testing, shoddy science and ill-equipped researchers are to blame for findings that its powder was contaminated with asbestos,” per the report. “But in recent years, thousands of people — mostly women with ovarian cancer — have said that the company did not warn them of potential risks that the company was discussing internally.”
In a statement, the Environmental Working Group said it was “good news.” “Now other companies need to follow their lead,” Scott Faber, EWG’s senior vice president for government affairs, said in a statement.