Banks become focus of protest groups trying to block pipeline projects
Protesters who have picketed pipeline projects that would ship oil from the tar sands of western Canada have taken their demands to a new venue of late: the offices of the companies that finance them.
Native Americans and environmental groups have started a campaign urging banks and other financial institutions to withdraw investments, loans and lines of credit for these projects.
Among the banks on the list are those with significant operations in central Ohio, including Columbusbased Huntington Bancshares;
central Ohio’s largest private employer, JPMorgan Chase & Co.; and Pittsburgh-based PNC Bank.
“The simple message is, please stop funding projects that are likely to cause global problems from climate change,” said Clark Williams-Derry, director of energy finance for Sightline Institute, a Seattle-based think tank. “These issues are real. They’re not going away. They’re just going to get worse because climate change is not going away.”
The target-the-finances technique was first tried to stop the completion of the $3.8 billion Dakota Access oil pipeline that ships oil from North Dakota to Illinois.
Although the pipeline did open this year, the groups had a measure of success by persuading a handful of banks to sell their interests in loans for the project.
The campaign also drew the attention of some cities, which severed their ties with banks that back these projects. For example, Seattle opted to end its relationship with Wells Fargo & Co. because of the bank’s involvement in the Dakota Access project.
The campaign has included protests, letter-writing and meetings with bank officials. Customers are being asked to move their accounts if they bank with a company that backs these projects.
During Chase’s annual meeting in May, one questioner asked CEO Jamie Dimon to stop Chase’s backing of these companies and delivered a letter of protest from 20 environmental and Native American groups. Construction of the Rover natural-gas pipeline was extensive in Stark County in early spring. This work was near Sherman Church Avenue at Riverdale Street in Bethlehem Township.
Dimon didn’t respond to the questioner.
The four pipelines that the groups are after would transport oil from Alberta to refineries along the U.S. Gulf Coast or to coastal shipping terminals. The lack of pipeline capacity in the region has slowed oil production there.
Environmentalists and Native Americans complain that getting oil from the tar sands and refining it is more energy-intensive and produces more carbon dioxide than processing oil from other parts of the world. They also question whether there is demand for the oil on global markets at a time when a glut has pushed prices down, and tribes complain that the pipelines may violate treaties and their sovereignty.
Through the use of regulatory filings, environmental group Greenpeace has identified banks from around the world that it says have provided significant financing for the pipelines. Huntington is among a group of smaller banks that have been targeted. The bank is part of a
group that has helped finance pipeline company Enbridge.
Separately, PNC has drawn protests in Ohio for backing Energy Transfer Partners, the company behind the $4.2 billion Rover natural-gas pipeline that’s being built in Ohio. The pipeline project is accused of numerous environmental violations, including spills of a slurry used when drilling a path for a pipeline beneath highways, rivers and other obstacles.
Energy Transfer is the same company that built the Dakota pipeline.
Huntington said it is committed to being environmentally responsible.
“Huntington has an energy lending team, which analyzes credit and cash-flow needs of companies in the energy field,” the bank said in an email. “We are not at liberty to discuss specific relationships but can confirm we do not have direct lending exposure to (the tar sands).”
PNC and Chase referred to their corporate-responsibility statements that note their commitment to reducing their
carbon-dioxide emissions and taking other steps to protect the environment.
Minneapolis-based U.S. Bank, which also has significant operations in central Ohio, has gone farther than most banks in acknowledging and acting on the concerns of anti-pipeline groups.
The bank issued an updated environmental-responsibility policy in April in which it said it will not provide financing for the construction of oil and gas pipelines. But some environmental groups have noted that the policy does not prohibit financing of companies that build the pipelines, and regulatory filings show the bank continues to back some major oil and gas companies.
The oil and gas industry says the effort to go after the banks is misplaced.
“As an industry, we’re focused on communicating and working closely with landowners and local communities, regulators and elected officials at all levels of government including tribal nations, project investors and other businesses when developing projects to ensure we’re answering questions about constructing and operating projects in a safety and environmentally responsible manner and incorporating feedback on sensitive areas to avoid,” said Michael Tadeo, spokesman for the American Petroleum Institute, a trade association for the oil and gas industry.
“Continued investment in our nation’s energy infrastructure network is critical to U.S. energy security. The U.S. energy renaissance has made our national the world’s largest producer of natural gas and oil and American consumers are benefiting in ways never thought possible from infrastructure that delivers affordable and reliable oil and natural gas for fuel, power and as a feedstock for products that we use every day — from cellphones and sneakers to medical devices to makeup.”
The campaign against the pipelines comes at a time when the price of oil is about half of what it was three years ago when prices topped $100 per barrel.
The lower prices alone may be reason enough to question why banks would even stick with these pipeline projects and the companies building them, said Tom Sanzillo, director of finance for Cleveland-based Institute for Energy Economics and Financial Analysis.
“The financial risk plus the ongoing matters regarding climate risk and then combined with local opposition to pipelines builds the kind of cumulative risks that might get the bankers to open their ears and eyes a little wider and perhaps keep the checkbooks closed a little tighter,” he said.