Trends in the Right Direction

Major Court Victory Halts Trans Mountain Expansion
On August 30, the Canadian Federal Court of Appeal quashed the regulatory approval for the (formerly Kinder Morgan) Trans Mountain Pipeline project. This was a major victory for the indigenous First Nations-led movement that has actively worked to stop this tar sands project for more than five years. The court unanimously ruled that the Canadian government’s approval was invalid due to inadequate consultation with impacted First Nations and the failure to consider considerable marine impacts. The ruling indefinitely sets back any possible start date for construction, which will further cramp the ability of tar sands companies to grow production. On the same day as the court decision, Kinder Morgan shareholders approved the now-final sale of the project and related infrastructure to the Canadian government for USD 3.46 billion. Prime Minister Justin Trudeau has vowed to continue pushing the project forward, even as studies underline that tar sands expansion is incompatible with Canada’s climate pledges. (Reuters, The Canadian Press)

Divestment Pledges Surpass USD 6 Trillion
A recent report shows that the global fossil fuel divestment movement has reached a new milestone. USD 6.2 trillion in funds – including those of Ireland, New York City, and London – are now committed to selling off oil, gas, and coal stocks, up from USD 52 billion four years ago. The report finds that the insurance industry accounts for roughly half of divested funds. The Guardian notes that the oil and gas sector is beginning to admit concern, with Shell’s last annual report warning that divestment “could have a material adverse effect” on the company’s finances. The divestment push aligns with last year’s declaration from leading economists that, “[T]here is no more room for new fossil fuel infrastructure and therefore no case for ongoing investment.” (The Guardian, Arabella Advisors)

Data

The charts below visualize the growth in fossil fuel divestment commitments tracked in the report released this month by Arabella Advisors. The report also finds that institutional divestment pledges span 37 countries.

Source: Arabella Advisors, The Global Fossil Fuel Divestment and Clean Energy Investment Movement, September 2018.

Insights

Model Treaty Would Protect ‘Keep It In the Ground’ Policies
One of two winning proposals of the first-ever Stockholm Treaty Lab contest provides an innovative framework to protect states’ rights to leave fossil fuels undeveloped. Developed by a team of international lawyers, senior economists, policy advisers, and other experts, most of them with the International Institute for Sustainable Development (IISD), the model treaty would enable governments to define sustainable and unsustainable investments in relation to their climate commitments. Its framework would stop the practice of investors suing governments for compensation over actions to keep fossil fuels in the ground, as TransCanada did when the U.S. Obama administration rejected a permit for the Keystone XL pipeline. (IISD, Stockholm Treaty Lab)

UK Quietly Proposes Major New Subsidy for North Sea Drillers
A recent op-ed from Shadow Treasury Minister Clive Lewis condemns an “unprecedented” giveaway to big oil and gas companies that the UK government is planning to slip into new tax legislation. The provision would allow companies buying oil and gas fields in the North Sea to inherit the tax histories of the sellers, reducing their tax bill while adding to the estimated GBP 24 billion that UK taxpayers are already due to pay for future decommissioning. Lewis points out that existing tax breaks have already dramatically reduced public revenue from North Sea drilling, and the government has failed to assess how further giveaways would align with the country’s climate pledges. (The Times)

Saudi Aramco IPO Halted – The Climate Connection
News broke last month that Saudi Arabia had shelved plans to privatize 5 percent of its national oil company Saudi Aramco. This would have been the largest initial public offering (IPO) in history. Concerns that the listing would not attract the USD 2 trillion value pitched by Crown Prince Muhammad bin Salman reportedly played a key role. A previous Oil Change International briefing examined how efforts to tackle climate change could significantly impact Aramco’s value, finding that as efforts to cut emissions reduce oil demand, the IPO value could drop to as little as USD 700 billion. The limited coverage of the climate aspects of the deal reflects how the media and financial institutions are still slow to draw connections between oil and climate change. (Reuters, The Guardian, Oil Change International)

Campaign News

South-East Australians Celebrate 10-Year Fracking Ban
The state government of South Australia approved a 10-year fracking moratorium in early September, after the Liberal-run government reversed its previous opposition to the measure. The bill will protect the water resources and agricultural industry of the Limestone Coast. The Limestone Coast Protection Alliance, part of the national Lock the Gate Alliance, fought for the 10-year ban, helping to build widespread public support, and declared they will next “work to have a similar ban placed on conventional gas fields.” (ABC News, Lock the Gate Alliance)

African Civil Society Organizations Declare Solidarity in Fossil Fuel Resistance
In August, civil society organizations on the front lines of fossil fuel resistance across Africa gathered in Lamu, Kenya for Oilwatch Africa’s annual meeting, under the theme Beyond Fossil Fuels. Together, participants developed solidarity strategies to overcome fossil fuel extraction in Africa, discussing the politics of a just transition for communities and workers on the continent and tracking the financial flows that enable fossil fuel expansion in the region. The conference resulted in a joint declaration from participants calling for a rapid and equitable transition away from fossil fuels, respect for community land rights, and an end to public financing of fossil fuels.

‘Code Rood’ Mobilization Pushes Europe to Move Beyond Gas
In late August, activists from across Europe descended on the gas-producing region of Groningen in the Netherlands for a week of protest against gas, called “Code Rood” (Code Red). Groningen has been the site of an active campaign against extraction for years, due to climate impacts and earthquake damages to surrounding homes and farms. Code Rood was the successor to recent years’ Ende Gelände coal protests, which drew activists from across the continent to shut down active coal mines. Throughout the week, over 600 activists blockaded a gas tank farm and prevented work from proceeding, in addition to maintaining a camp and organizing several marches. Code Rood was the next step in European civil society’s active resistance to gas, demanding a just transition away from all fossil fuel extraction. (Dagblad van het Noorden, Code Rood, Volkskrant)

In Louisiana Bayou, Activists Stall Dakota Access Pipeline Link
U.S.-based Energy Transfer Partners (ETP) is still building an offshoot of the Dakota Access Pipeline – and still facing resistance – in the bayous of Louisiana. Indigenous activists and local allies with the L’Eau Est La Vie camp have stalled ETP’s plans despite brutal arrests by off-duty police and a new law in the state that further criminalizes protests by designating pipelines as “critical infrastructure.” Last week, advocates won an injunction that will force ETP to stop construction across private land on which the company was illegally trespassing, pending formal “expropriation” proceedings. ETP has repeatedly pushed back startup of the project, which would link Dakota Access to refineries in Louisiana’s “Cancer Alley.” The company is now aiming for December. Meanwhile, landowners have countersued ETP over the company’s trespass. (The Nation, The Times-Picayune)

More Headlines

As ‘Oilsands Era’ Ends, Canada Needs a Just Transition Plan
New reporting from the CBC offers a reality check on the future of Canada’s tar sands industry, noting that the “boom” of investment that began over a decade ago is largely over. Suncor’s massive new Fort Hills project, officially opened last week at a cost of CAD 17 billion, is part of a “last big gasp” of tar sands megaprojects. The economic and social effects of this slowdown in investment are already being felt in the epicenter of the industry – Fort McMurray. While the Canadian government has established a Just Transition Task Force for coal, the government has not yet begun seriously planning for the decline of the country’s oil sector, which will be necessary to meet the Paris goals. During a just transition dialogue convened by non-governmental partners in May, participants emphasized that Canada has a “short runway” to plan for the rapid phase-out that climate safety requires. (CBC)

Argentine President Doubles Down on Vaca Muerta, with U.S. Support
Despite ongoing opposition from local communities, indigenous groups, and civil society organizations, Argentina’s President Mauricio Macri reasserted his government’s commitment to rapid development of the Vaca Muerta shale last month, declaring, “We are not going to stop until we export US$ 30 billion in gas and oil from Vaca Muerta.” New details emerged recently surrounding the U.S. government’s role in supporting this “invasión fracking,” as described by a researcher with Observatorio Petrolero Sur. The U.S. State Department funded and organized several recent workshops in the Vaca Muerta region, home to one of the world’s largest undeveloped shale deposits. The State Department flew in academics from the heavy fracking region of Pennsylvania to share technical knowledge of shale development. (DeSmog Blog)

Industry News

Marketing the Myth of Responsible Gas: A major U.S. shale producer rolled out a new public relations tact this month – selling fracked gas certified as “responsible” by the firm Independent Energy Standards (IES). The IES certification program is intended to make fracked gas more palatable to European customers. However, analysis shows that new gas development is not compatible with the Paris goals, regardless of how it is extracted. (Financial Times)