JPMorgan Chase, the TD Bank Group, and Barclays are among the world’s major banks financing tar sands pipelines and the companies behind them (Kinder Morgan’s Trans Mountain Expansion, TransCanada’s Keystone XL, and Enbridge’s Line 3 expansion).
Diana Best, Senior Climate and Energy Campaigner at Greenpeace USA, said: “Banks betting on tar sands pipelines have failed to take to heart the lessons from the Dakota Access pipeline, including the consumer backlash that led to $5 billion in account closures. More and more banks, including BNP Paribas, ING, and US Bank, refuse to fund controversial oil pipelines. JPMorgan Chase remains a major tar sands pipeline player, leaving itself vulnerable to reputational risks when it has the power to choose a different path.”
Among the major risks identified in the report are:
- Lack of free, prior and informed consent (FPIC) from all Indigenous communities impacted by the pipelines. On-the-ground resistance is already unfolding along the routes of the Kinder Morgan and Line 3 pipeline expansions. JPMorgan Chase’s human rights policy1 states that the bank expects its clients to align with FPIC requirements, raising questions about Chase’s continued pipeline lending.
- Negative environmental impacts, including the contamination of drinking water from leaks. The companies proposing to build the three new tar sands pipelines have seen one spill a week, on average, in the U.S. since 2010. New pipelines threaten thousands of watercourses, aquifers and bodies of water with spills. Kinder Morgan’s Trans Mountain Expansion goes through a UNESCO World Heritage site, Jasper National Park, which appears to contravene TD’s policy of not financing projects that operate in such sites.
- Tar sands pipelines’ economic success is dependent on tar sands expansion. Low oil prices and structural changes in oil demand, including Asian and European markets’ shift away from fossil fuel vehicles, raise questions about the long-term viability of the tar sands, and pipelines dependent on their expansion.
- Short-term lending decisions undermine bank and investor action on climate. The three proposed pipelines could add almost 2 million barrels per day to pipeline capacity. Facilitating the expansion of the tar sands and enabling decades-long carbon-lock in risks fatally undermining JPMorgan Chase’s policies, which recognize the goals of the Paris Agreement, as well as TD’s work with the UN to better assess and disclose climate risks and opportunities and Barclays’ plans to develop a sustainable approach for its global energy client portfolio.
The report, therefore, recommends that banks do not finance or arrange financing (including the issuance of securities), related to new tar sands pipelines. Existing funders are encouraged to sell their stakes in full or not renew credit facilities. The report further provides bank investors with a list of questions to pose to management to understand whether risks are being properly managed.
Hannah McKinnon Director, Energy Futures and Transitions Program at Oil Change International said: “Keeping the tar sands afloat is an inexcusable ethical decision and a reckless financial one. Banks need to decide which side of history they want to be on. The world is moving on from fossil fuels and banks that miss the memo are going to be left with two things: a worthless portfolio of stranded assets and the reputational cost of knowingly financing the climate crisis.”
Another report commissioned earlier this month by the Secwepemc Nation in B.C., whose land Kinder Morgan’s new pipeline is slated to cross, further details risks related to Indigenous assertions of their rights and title over unceded land.
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Notes to editors:
[1] JPMorgan Chase & Co. 2016. Environmental and Social Policy Framework.
Report: https://www.greenpeace.org.uk/InThePipeline.
Contact:
Valerie Holford, Communications Officer on behalf of Greenpeace USA, 202-365-5336, [email protected].
