Gas and Oil Loan Guarantees
$n/ million

Background In 1999, a program was established that provides guaranteed loans to certain oil and gas producers. Although the loans are financed through private banking and investment institutions, taxpayers guarantee them. The program provides loans of up to $10 million to individual companies that meet the broad eligibility criteria, and caps the total amount that can be loaned at $500 million.

Green Scissors Proposal Eliminate the "Oil and Gas Loan Guarantee Program."

Project Hurts Taxpayers Under this program, taxpayers could be liable for up to $500 million should these companies default on their loans. That number jumps to $600 million if the administrative costs associated with the program are included. Additionally, although crude oil prices were at a 25-year low in early 1999, major oil companies still enjoyed net revenues of more than $16 billion. There is no need for taxpayers to prop up this multi-billion dollar industry.

Project Hurts Environment Guaranteeing loans for the oil industry only encourages the development and misuse of the dirty fuels that cause air pollution, smog, and global warming. It is estimated that the oil industry loses 280 million barrels per year through leaks, spills, and other inefficiencies.