Golden Parachutes: Profit and Poison

By: Julia Weil, Organizing Intern
Throughout the COVID-19 pandemic, we have increasingly seen many social, economic, and environmental injustices in our society highlighted. One injustice that encapsulates all three is being demonstrated by the increasing pattern of oil and gas companies, struggling as the demand for their product decreases, paying out their executives just before filing for bankruptcy, making the rich richer, and exposing at-risk populations to higher quantities of dangerous chemicals than ever. 
This practice of paying executives vast sums of money before going bankrupt is known as a “golden parachute.” One of these companies is Chesapeake, one of the first companies to popularize hydrofracking. Just before filing for bankruptcy, $25 million was given to 21 employees that ranked high in the company’s hierarchy in the form of “retention payments,” though typically this type of payment is intended to keep employees at the company for a designated amount of time. 
Other recent examples of this practice have occurred with Whiting Petroleum, a shale drilling company that was able to secure $15 million for its top executives days before the bankruptcy filing, and Diamond offshore drilling, a company that was granted $9.1 million through a COVID-19 stimulus check, and that filed for bankruptcy just one month later. 
This is not only an economic injustice, but, as they are frequently closely associated, it is also blatant environmental injustice. The workers are left out of the equation, and when the majority of the remaining money is funneled directly into the pockets of the most powerful company members, the financial planning frequently doesn’t account for the cost of well-closing — money isn’t left over to properly seal the wells. 
When this happens, the already harmful fracking wells will leak greater quantities of methane and contaminated water. This is the case for MDC energy, who also paid their executives $8.5 million before filing for bankruptcy.  One estimate showed that cleaning up, closing the wells and halting the consistent methane leakage for this particular company would cost $40 million; an amount which, after paying the executives, did not remain. 
Though all of the instances discussed here happened more recently, in 2016, there was an estimation of 3.2 million orphaned (or inactive) oil and gas wells in the US, and over 2 million of these were not properly sealed. Although hydrofracking wells also leak while in operation, when they’re out of use and not monitored, they release even greater amounts of the toxic chemicals. Contaminated water from hydrofracking can contain benzene, toluene, arsenic, manganese, barium and strontium, many of which are carcinogenic. 
Methane leakage is additionally dangerous because of its warming capabilities – it is an especially potent greenhouse gas; though it doesn’t last as long as carbon dioxide in the atmosphere, it is 25 times stronger of a warming agent. Additionally, atmospheric methane concentrations have more than doubled in the last couple centuries – the orphaned fracking wells will significantly accelerate this problem. 
Since this bankruptcy boom is expected to continue – one estimate expects 250 oil and gas companies to file for bankruptcy protection before the end of next year – this puts more and more communities at an increased risk of the effects associated with methane and other toxic chemicals. Waste from gas and oil companies already disproportionately impacts Black and low income communities; this phenomenon further worsens this instance of environmental racism and injustice, while those who should be held responsible profit.