Ending Fossil Fuel Bailouts Act of 2026

Key Points

• This bill rewrites bankruptcy law so that oil, gas, and coal companies cannot dodge their environmental cleanup obligations when they go broke. Environmental reclamation costs would be treated as necessary expenses that must be paid from the company's assets before most other creditors get anything.
• Regular workers' wages and benefits get paid first, followed by environmental cleanup costs, before shareholders, unsecured creditors, or other claimants receive anything. Executive officers are specifically excluded from this worker protection.
• If a bankrupt fossil fuel company does not have enough money to cover worker pay and cleanup costs, courts can claw back executive pay from the previous five years. Parent companies, private equity firms, and hedge funds that own a share in the company would also be on the hook under strict joint and several liability.
• The bill bans fossil fuel companies in bankruptcy from abandoning properties used in their operations and prevents them from transferring federal oil, gas, or coal leases while in bankruptcy proceedings.
• The look-back period for fraudulent transfers is extended from two years to ten years for fossil fuel companies, giving courts much more time to investigate whether companies moved money or assets to avoid paying cleanup costs before filing for bankruptcy.