THE BIG PICTURE

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One thing we can count on heading into the UK-hosted COP26 is a proliferation of “net zero” emissions pledges from countries, financial institutions, and oil and gas companies. Skepticism is warranted.

As Tzeporah Berman and Nathan Taft write in The Guardian, many of these pledges are being used as a “guise” to “justify expanding the production of fossil fuels.” Striking a similar note, the just-released 2021 Banking on Climate Chaos report stresses, “2050 commitments should be met with great skepticism unless they are accompanied by 2021 action on coal, oil, and gas,” adding, “net zero in 30 years’ time is largely meaningless without immediate actions” to align with 1.5°C.

Last week, the UK provided a case in point. While touting its commitment to a “net zero future by 2050,” Boris Johnson’s government released a “North Sea Transition Deal” that allows companies to keep expanding oil and gas exploration and extraction. Instead of joining the governments of Denmark, Ireland, France, and New Zealand in ending new oil and gas licensing rounds, the UK government plans to put an ill-defined “climate compatibility” check on them. This is despite the fact that governments have already licensed enough oil and gas to push us beyond 1.5°C of warming, and despite the clear moral obligation that wealthy fossil fuel producing countries have to move first in phasing out extraction.

UK campaigners responded swiftly. “The UK government’s refusal to end oil and gas licensing is an insult to its international climate obligations and puts support for a faltering industry ahead of a liveable future,” said Gabrielle Jeliazkov of Platform. Mel Evans of Greenpeace UK called it “a colossal failure in climate leadership in the year of COP26.”

As this CNN headline aptly puts it, the UK, as well as Canada and Norway, are actually “climate hypocrites” – claiming to be climate champions while expanding their own fossil fuel production. Climate leadership rests not on vague “net zero” pledges far into the future, but on bold action in 2021: governments putting an end to new 30-year licenses for oil and gas development; banks stopping the gush of finance for new fossil fuel infrastructure.

–The OilWire Team

THE DATA

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The 2021 edition of Banking on Climate Chaos (formerly Banking on Climate Change) launched on 24 March. It is the most comprehensive analysis of fossil fuel banking produced to date. The report finds that:

  • In the five years since the Paris Agreement was adopted, the world’s 60 largest private banks financed fossil fuels with USD 3.8 trillion.
  • Despite a massive global drop in fossil fuel demand and production last year, banks’ 2020 fossil fuel financing numbers still remained above 2016 and 2017 levels, as shown in the figure below.
  • This year’s report notes that, while banks’ “strongest policies so far are focused on the restriction and phase-out of coal financing, 69% of the fossil fuel financing analyzed was for oil and gas companies.”

Since Paris, these banks have poured a staggering USD 1.5 trillion into the top 100 companies behind fossil fuel expansion projects – including an alarming 10% increase in 2020 over the previous year, even though overall fossil fuel financing dipped over that same period.

For the fifth year in a row, JPMorgan Chase remains the world’s worst funder of climate chaos. Citi came in a close second in 2020, with Bank of America in third place, continuing Wall Street dominance of global fossil fuel financing.

Fossil fuel financing from the world’s 60 biggest banks


Source: Banking on Climate Chaos: Fossil Finance Report 2021, Rainforest Action Network, BankTrack, Indigenous Environmental Network, Oil Change International, Reclaim Finance, and Sierra Club, March 2021.

 

WHAT WE’RE TRACKING

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Trends in the right direction

 

UK confirms immediate end to public finance for fossil fuel projects overseas
While ceding climate leadership on fossil fuel licensing, the UK did take a positive step forward last week on finance. In the same announcement, the UK government confirmed that the commitment it made last December to end international public finance for fossil fuel projects will go into immediate effect and said it would pursue a vision for how other countries and finance institutions could collectively shift international support from fossil fuels to clean energy. This makes the UK the first government in the world to end this form of finance. While celebrating this win, Laurie van der Burg, Senior Campaigner at Oil Change International, noted that the UK undermined its own credibility in pushing other countries to follow its lead with the “hypocritical” choice to “continue issuing new licenses for domestic oil and gas production.”

Barclays and Credit Suisse rule out finance for East African pipeline after CSO letter
On 1 March, over 260 organisations, including over 120 African-based groups, sent a letter to the CEOs of 25 banks urging them not to finance the construction of the East African Crude Oil Pipeline (EACOP). In mid-March, the campaign to #StopEACOP gained more momentum: Barclays and Credit Suisse both declared they will not provide financing for the project. Total is nearing a final investment decision on the 1,445-kilometer-long project. It would be the largest heated oil pipeline in the world and threaten local communities, water supplies, and biodiversity in Uganda, Tanzania, Democratic Republic of Congo, and Kenya, in addition to fueling the climate crisis.

Permit surrender ends frontier oil and gas exploration in New Zealand
New Zealand Oil and Gas (NZOG) has relinquished its final permit to explore for domestic oil and gas outside of the country’s already developed Taranaki Basin. NZOG said they were unable to find a “partner to progress drilling” and bemoaned the “end of an era.” New Zealand’s government stopped issuing new offshore exploration permits in 2018, and the only remaining active permits are in the Taranaki basin.

South Texas communities win fight against Annova LNG export terminal
Annova LNG is one of three proposed fracked gas export terminals that have been opposed by communities in the Rio Grande Valley in South Texas. Last week, these communities won a big victory after “six years of tireless efforts”: The companies behind the Annova project, including Exelon and Enbridge, cancelled it. This came just before the DC Circuit Court was due to hear arguments against the U.S. Federal Energy Regulatory Commission’s approval of the three terminals. According to Juan Mancias, Chairman of the Carrizo Comecrudo Tribe of Texas, “There’s more work to do to ensure other proposed fracked gas export terminals, which would desecrate our burial sites and sacred lands, are never built, but today we celebrate this important victory for our people and our environment.”

Campaign news

 

Campaign launched for a #FossilFreeADB
The Asian Development Bank (ADB) is revising its energy lending policy for the first time in a decade, offering a huge opportunity to pressure the bank to go fossil free. Earlier this month, civil society organisations and people’s movements from Asia, Europe, North America, and Australia launched a “Fossil Free ADB” campaign, calling on the ADB to use its energy policy review to end its financing and support for gas, coal and oil. This campaign builds on long-standing work on the ADB by the NGO Forum on the ADB and the Asian Peoples Movement on Debt & Development, among many others. Learn more about the #FossilFreeADB campaign and ways to support the call to action at: FossilFreeADB.org.

World Bank under increasing pressure to end all support for fossil fuels 
As the World Bank prepares to release its new Climate Change Action Plan for 2021-2025, 153 organisations and academics sent the bank a letter this month calling for a “whole-of-institution commitment to end all types of support for fossil fuels, both direct and indirect.” Pressure on the bank is mounting as the UK, the European Union (EU) and the US have all made similar commitments in the past four months. At the end of February, nine of the World Bank’s own executive directors, representing major European shareholder countries and Canada, urged the bank to exclude all coal and oil-related investments and implement a policy to phase out investment in gas power.

Pressure builds on the EU to exclude gas from energy infrastructure priority list 
The EU is accepting public input on its fifth priority list for energy infrastructure projects, known as the “PCI” list, until 8 April. Seventy-four large fossil gas projects have applied to be included; if accepted, these projects will get access to EU funding and other benefits including accelerated implementation. Further detail is available in this briefing and template consultation response by Food and Water Action Europe and CAN Europe, which provides detailed information on the candidate projects. Respond to the consultation here and sign the petition calling on the EU to exclude fossil gas projects from the PCI list (also available in Italiano, en Español, auf Deutsch, en Français).

More than 370 groups urge Biden to stop the Line 3 pipeline; Jane Fonda visits resistance camp
The proposed Line 3 tar sands pipeline would cause carbon emissions equivalent to fifty new coal plants each year and put 200 bodies of water at risk from oil spills. As construction continues in the U.S. state of Minnesota and Indigenous-led camps build resistance along the pipeline route, over 370 civil society groups from the United States and around the world sent an open letter to U.S. President Joe Biden this month. They are urging him to stop Line 3, and protect Indigenous rights and the environment, by suspending its improperly issued federal permits. Actress Jane Fonda recently visited the pipeline resistance camp to lend her microphone, and journalist Emily Atkin is doing two weeks of reporting from the ground.

Biden also under pressure to end support for fossil fuels internationally
In a letter released earlier this month, almost 450 organisations from over 50 countries called on President Biden to end all U.S. public finance for fossil fuels. Signatories included organisations from the Global South impacted by U.S. funded fossil fuel projects. Over the past decade, the US has provided an average of USD 4 billion per year in public finance to fossil fuel projects overseas.

There is also increasing scrutiny of the polluting activities of U.S. oil majors abroad. In this related post, Chairman Okoloise, Africa Analyst at Oil Change International, argues that meaningful U.S. climate diplomacy must address the dirty footprints and corrupt lobbying practices of these companies.

Byhalia oil pipeline threatens health and water supplies in U.S. South
FracTracker has mapped the environmental, geological, social, and economic reasons the proposed Byhalia crude oil pipeline should not be built. The U.S. project would carry up to 420,000 barrels of oil a day through the states of Tennessee and Mississippi, bound for the Gulf Coast. The pipeline route would cross many waterways, including protected areas and an aquifer that provides drinking water for over 400,000 people. Construction is planned to begin in early 2021 and be completed by year’s end. The lead company behind the pipeline, Plains All-American, insists that all safety precautions are being considered, but the outcry among residents and environmental advocates has been considerable.

Backlash builds to oil sponsorship at UK Science Museum
A third speaker has pulled out of a series of ‘Climate Talks’ organised by the UK’s Science Museum Group over the museum’s sponsorship by oil companies BP and Equinor. Comedian and broadcaster Robin Ince pulled out on 8 March, revealing: “I worry that sponsorship of the Science Museum, even more than sponsorship of major art events, offers a fig leaf, a presumption that ‘Well, if the science museum is sponsored by them, those oil companies must be doing the right thing (morally? ethically? scientifically?).’” He followed George Monbiot and Mark Lynas, who both pulled out of their events in late February. Monbiot stated on Twitter: “I mean, what respectable organisation still takes money from this planetary death machine?”

More headlines

 

Groups slam European Commission over plans to include fossil gas in green taxonomy
The latest draft proposal of the EU green taxonomy features plans to include gas-fueled power plants as a “green” investment under certain conditions, particularly where it replaces coal. A group of 225 scientists, financial institutions, and NGOs have signed a letter to the Commission asking them to reconsider, drawing attention to the potent global warming effects of methane. The letter argues that, based on the rate of planned coal closures in Europe, the taxonomy’s gas rules could end up incentivising building new gas cogeneration plants without driving the closure of coal plants. The proposal contradicts the recommendations of the Commission’s own Technical Expert Group, published last year.

California county approves thousands of new wells, contradicting state climate goals
California has set some of the most ambitious climate goals in the US, pledging to reduce its emissions by 40% by 2030 from 1990 levels. Yet Kern county, which produces roughly 80% of the state’s oil and gas production, passed an ordinance earlier this month that will permit the drilling of around 40,000 new wells, in direct contradiction of the state’s goals. Community organisers and environmental groups led by the Center for Race, Poverty and the Environment quickly filed a lawsuit to stop this fast-tracking of new drilling. Kern County has some of the most polluted air in the US, and the environmental and health impacts of new drilling will disproportionately affect communities of colour.

Southern Patagonia: Argentina promotes gas expansion at the south of the continent
The Argentine Ministry of Energy awarded new onshore and offshore exploration contracts to fossil gas producers under “Plan Gas 4,” expanding exploration in the Neuquén and Austral Basins, the former being the site of the Vaca Muerta fracking project. Companies that benefited from the measures included: YPF, Total Austral, Pan American Energy (PAE), Wintershall DEA, and Compañía General de Combustibles (CGC). Víctor Quilaqueo of Observatorio Petrolero Sur writes that this “constitutes a political endorsement for the development of activities such as offshore [drilling] and hydraulic fracturing.” Read the full update (in Spanish).

Investigation launched into the illegal handling of fracking waste in Vaca Muerta 
DeSmog published an in-depth story this month on the battle to hold local governments and oil companies accountable over illegal fracking waste sites in Vaca Muerta, the hotspot for fracking in Argentina. A group of environmental lawyers filed a criminal complaint in December alleging that large quantities of toxic fracking waste have been dumped illegally, without proper treatment, in some cases near residential areas. The office of Environmental Crimes and Special Laws in the Argentine province of Neuquén is investigating the complaint, which points fingers at the region’s top oil producers, including ExxonMobil and Chevron, in addition to municipal and regional authorities and the waste company Comarsa.

Energy experts launch work on first ‘Global Registry of Fossil Fuels’ 
Carbon Tracker Initiative and Global Energy Monitor are teaming up to produce the world’s first publicly available, comprehensive database of all fossil fuel reserves in the ground and in production. The project, commissioned by the Fossil Fuel Non-Proliferation Treaty Initiative, will produce a prototype database ahead of COP26. The effort is intended to catalyse greater transparency among governments on fossil fuel supply and reserves.

Industry news

 

Groups file U.S. greenwashing complaint against Chevron in precedent-setting case 
Global Witness, Earthworks, and Greenpeace USA have jointly filed a complaint to the U.S. Federal Trade Commission (FTC) arguing that Chevron’s ads and public pledges of “ever-cleaner energy” amount to greenwashing. Chevron consistently misrepresents its image across social media, television, and other marketing avenues to appear climate-friendly and racial justice-oriented, while its business operations overwhelmingly rely on climate-polluting fossil fuels that disproportionately harm communities of color. The groups argue that this amounts to a breach of the “Green Guides,” the FTC’s guidelines on misleading environmental marketing. FTC action would represent the first use of the Green Guides against a fossil fuel company. While Chevron’s ad strategy is built around “low carbon” rhetoric, its oil and gas production may increase by 15% over the next four years.

Climate Action 100+ analysis shows again: Oil industry climate pledges are insufficient 
Climate-focused investor coalition the Climate Action 100+ (CA100+) has released its Net-Zero Company Benchmark rating the climate commitments of “systemically important” corporates in various sectors. The group assessed the Paris alignment of companies on the basis of short-, medium-, and long-term emissions reduction targets, capital allocation alignment, and climate governance, among other factors. The benchmark reconfirms that no fossil fuel major has meaningful plans to align with the ambition of limiting warming to 1.5°C. Advocates say these findings should trigger stronger action from investors themselves. Lucie Pinson of Reclaim Finance responded, “Investors need to drastically up their engagement game. If investors don’t want to do what needs to be done for the climate, let’s hope they now decide to act out of self-protection from future stranded assets.”

Oil industry deliberately cast doubt on the health impacts of air pollution, despite understanding the risks for decades 
The Guardian reported on internal fossil fuel sector documents that reveal that oil firms knew of the human health risks associated with air pollution from the burning fossil fuels over 50 years ago. In an internal technical report in 1968, Shell warned that air pollution may “be deleterious to health” causing “suspected long term chronic effects.” Despite this, the industry spent the past several decades lobbying against clean air regulations, paralleling similar attempts to undermine climate science from the industry.

Shell funds anti-climate lobbying despite recent climate pledges
Despite vowing to align its membership in trade associations with support of the Paris Agreement, Shell continues to “fund a network of lobbying groups that fight policies to curb planet-heating emissions and rein in new drilling.” The Independent Petroleum Association of America (IPAA), in which Shell remains a member, lobbied for a regulatory proposal introduced in the final days of the Trump administration that would have undermined banks’ climate-based lending policies, such as exclusions for Arctic drilling or coal mining. Yet, the IPAA wasn’t included in Shell’s annual review of its trade associations in 2020. Shell also remains a member of the American Petroleum Institute.

Shell’s U.S. Falcon Pipeline under investigation for serious public safety threats
Shell’s Falcon Ethane Pipeline System is at the center of major investigations into possible noncompliance with construction and public safety requirements and failing to report drilling mud spills, according to documents obtained from the Pennsylvania Department of Environmental Protection (PA DEP) by FracTracker Alliance. These investigations, which are yet to be released, also uncovered instances of alleged data falsification in construction reports and Shell Pipeline Company firing employees in retaliation for speaking up about these issues.

Shell and Eni acquittal called ‘stain on Italy’; report shows how Eni is polluting the EU policy process
Executives of Eni and Shell were acquitted this month in the corruption case brought against them in Italy over a Nigerian offshore oilfield deal. Environmental and social justice groups decried the verdict as a “stain on Italy” and an indication of “just how hard it is to hold the fossil fuel industry to account,” encouraging prosecutors to appeal.Ahead of the verdict, Global Witness released a report detailing how Eni has been leading lobbying efforts to push for the EU to support climate-wrecking fossil gas. Eni holds more European Parliamentary Passes than any other energy firm and, together with pro-gas industry groups, has spent EUR 100 million on lobbying since 2014. The report calls on “European officials to institute a firewall to end the fossil fuel industry’s access to decision makers.”

RESOURCES

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Workers and Communities in Transition: Report of the Just Transition Listening Project
The Labor Network for Sustainability in the U.S. has released a report from its “Just Transition Listening Project.” The project aimed to capture and elevate the voices of workers and community members who have or will be affected by the transition off of fossil fuels. It emphasises that “transitions are about more than just jobs, they are about people and the trauma that remains from being abandoned by workplaces and the government.” It makes recommendations for a meaningful just transition based on the findings.

Taking the Next Step: Why insurers should not support new gas infrastructure, starting with LNG
This report from Urgewald highlights the role of European insurers in supporting fossil gas infrastructure. Key supporters of large fossil gas projects include Allianz, Talanx, AXA, Generali, and Munich Re. The report calls on insurers to end support for new fossil gas projects, and to develop policies to phase out insurance for the gas sector.

Getting On Track to 1.5°C: The IEA’s opportunity to steer investments towards success in meeting the Paris Goals
The IEA is due to release an energy scenario compatible with limiting warming to 1.5°C in a special report in May. This briefing note from Oil Change International sets out the steps the IEA must take in order to ensure that the new scenario is robust and able to effectively guide the required transformative shift in energy investment.

Risks for new gas developments in Appalachia
In a new report, Stockholm Environment Institute and Ohio River Valley Institute investigate the economic viability of gas in Pennsylvania, Ohio, and West Virginia, finding that the sector is vulnerable to sustained low prices.

Study shows billions in company payments failing to improve lives in Niger Delta
A new study co-authored by Policy Alert (Nigeria) and Publish What You Pay (PWYP) UK finds that millions paid towards development in the Niger Delta is failing to enhance environmental protection or improve people’s lives. The 3% annual budget levy from oil companies to Nigeria’s Niger Delta Development Commission (NDDC) delivered USD 3.2 billion between 2014-19, yet this has done little to mitigate the negative impacts of daily life near to fossil fuel infrastructure, including oil spills and gas flaring, a lack of safe drinking water and decent sanitation, and inadequate healthcare.

Future Beyond Shell launches with new reports
The Future Beyond Shell coalition, which includes codeROOD, SOMO, and TNI, has launched a new website and reports examining Shell’s role in exacerbating the climate emergency. “Still Playing the Shell Game: Four Ways Shell Impedes the Just Transition” and “The Future We Want” set out Shell’s historical and present role in blocking progress on climate and the just transition, and set out proposed solutions.

EU companies burn fossil gas and taxpayer cash
In this analysis, Global Witness analyses the EU’s spending on gas infrastructure, finding that EUR 440 million has been spent on projects that have either failed or are likely to fail, almost 10% of the total. The EU has spent EUR 5 billion in taxpayer grants and subsidized loans on gas projects since 2013.

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