November 8, 2016 Read More →

An Emerging Strategy for Challenging Questionable Energy Projects: Go After the Financiers

Hiroko Tabucchi for the New York Times:

In early August, just as protesters from across the country descended on North Dakota to rally against an oil pipeline near the Standing Rock Sioux Reservation, some of the world’s biggest banks signed off on a $2.5 billion loan to help complete the sprawling project.

Now, those banks — which include Citigroup and Wells Fargo of the United States, TD Bank of Canada and Mizuho of Japan — have come under fire for their role in bankrolling the pipeline. In an open letter on Monday, 26 environmental groups urged those banks to halt further loan payments to the project, which the Sioux say threatens their sacred lands and water supply.

In campaigning to reduce the world’s carbon emissions, environmentalists have increasingly focused on the financiers behind the fossil fuel industry — highlighting their role in financing coal, oil and gas projects. It is an expansion of traditional protest efforts, and it has met with some early success.

Banks have a choice to either finance the transition to renewable energy, or to finance pipelines and power plants that will lock us into fossil fuels for the next 40 years,” said Johan Frijns, director of BankTrack, a Netherlands-based advocacy organization that led the campaign.

Banks have a choice to either finance the transition to renewable energy, or to finance pipelines and power plants that will lock us into fossil fuels for the next 40 years,” said Johan Frijns, director of BankTrack, a Netherlands-based advocacy organization that led the campaign.

In their battles with banks, environmentalists have scored some early victories. After a concerted effort by climate-change campaigners, several global banks, including Barclays, ING and Deutsche Bank, stepped back over the last two years from projects that involve mountaintop removal mining, a practice experts say is particularly damaging to the environment.

Earlier this year, JPMorgan Chase announced that it would no longer finance new coal-fired power plants in the United States or other wealthy nations, a retreat that followed similar announcements by Bank of America, Citigroup and Morgan Stanley. The banks’ move away from coal, however, appeared motivated as much by the plunging profitability of coal as by concerns over climate change.

Experts also question the profitability of the Dakota pipeline, at a time of slumping oil prices.

“A lot of infrastructure investment, particularly pipelines, is built around strong oil-demand projections that go out decades,” said Mark Campanale, founder of the Carbon Tracker Initiative, a financial think tank that focuses on energy and climate change. “If the scenarios around demand for oil is wrong, it’s likely that people are building costly infrastructure on a false promise — that the oil is going to be needed in 30 to 40 years.”

The loan to Energy Transfer and its partners Sunoco Logistics Partners and Phillips 66 was led by Citigroup, Mizuho, Bank of Tokyo Mitsubishi UFJ and TD Bank, according to a filing with the Securities and Exchange Commission.

Full article: Environmentalists Target Bankers Behind Pipeline

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