Welcome to “Feet to the Fire: Big Oil and the Climate Crisis,” a newsletter in which we share our latest reporting on how the fossil fuel industry drives climate change and influences climate policy in five of the nation’s most important oil and gas-producing states. In addition, we shine a spotlight on the financing of the fossil fuel industry, holding banks and other financial institutions accountable for their role and providing you with updates on their activities.
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New Law Is Making It Harder for Oil Companies to Offload Dying Wells — and Pass on Their Cleanup Costs.
Hundreds of old oil wells were for sale in California this year, but a new state law that requires operators to put up bonds to clean them stood in the way. Companies in the state had hoped to sell 766 such wells, which can emit methane and pollute soil and groundwater; old oil wells were traditionally bought up by smaller firms that couldn’t always afford to clean them up when they ran dry. But the law, which seeks to avoid having taxpayers end up footing the bill to remediate them, has been effective at slowing down that practice, reports Capital & Main’s Aaron Cantu.
Trump’s Election Will Likely Kill the EPA’s Long-Delayed Response to New Mexico’s Oil and Gas Pollution
Ozone levels in New Mexico’s part of the Permian Basin are dangerously high, and state officials have been promising that a federal response was on the way. But Donald Trump’s election is very likely to delay any EPA action since he and Lee Zeldin, his nominee to head the EPA, have said they will seek to reduce oversight and regulation of the oil and gas industry. Federal action to address pollution in the basin is “no longer imminent,” said James Kenney, secretary of New Mexico’s Environment Department. Yet a regional spokesperson for the EPA told Capital & Main’s Jerry Redfern that their work to “implement President Biden’s agenda is undeterred.”
Is a Misleading Name Making It Harder for Texas to Address Climate Change?
The Texas Railroad Commission sounds like a government agency that regulates trains. In actuality, the agency has major authority over the state’s powerful oil and gas industry — with oversight over natural gas utilities, coal and uranium mining, and half a million miles of pipelines — yet not a single mile of rail line. And government watchdogs are concerned that its antiquated name may confuse voters electing members of the commission, as well as Texans who are concerned about drilling as climate change has an increasing impact on the state, reports Capital & Main’s Elliot Woods.
Trump’s ‘Drill, Baby, Drill’ Mantra Won’t Likely Impact Production, Says Former Big Oil Exec
Despite Trump’s campaign rhetoric attacking President Biden’s energy policy and focusing on unleashing America’s oil and gas industry, the industry is doing just fine, said former ConocoPhillips economist Marianne Kah. “I think the oil industry is producing whatever it would have done, even if Trump was president,” she told Capital & Main’s Redfern in an interview, noting the industry’s capital discipline and “substantial growth” in production this year. Kah also noted that the oil majors are not the best ones to be investing in renewables since “they’re not good at dealing with regulatory environments, and the power market is certainly all about that.”
Missing From Global Climate Talks: Language About Shifting Away From Fossil Fuels
The recent G20 and COP29 meetings in Brazil and Azerbaijan, respectively, included lots of talk about cutting emissions and supporting clean energy, but what stood out for many was the language that was missing — any statements about shifting away from fossil fuels. One of the obstacles to including that language was Saudi Arabia, according to several reports, with observers telling Climate Home that Saudi negotiators were “happy to be destructive.” Champa Patel, executive director for governments and policy at the Climate Group, was disappointed, saying, “It’s outrageous that in 2024, which is already the hottest year on record, the biggest economies in the world can’t state the truth: that we need to phase out fossil fuels now.”
Also missing, at COP29, were details on the amount of money that developed nations would contribute to help developing countries transition to clean energy, with drafts of the summit’s negotiating document leaving the space for money marked with an X, reports Reuters. “All of this is turning into a tragic spectacle, a clown show, because when we get to the last minute, we always get a text that is just so weak,” said Panama’s lead negotiator, Juan Carlos Monterrey Gómez.
The disappointment comes on top of concerns that the annual summit, which was focused on finance this year, wasn’t attended by executives from the world’s leading fossil fuel financiers — including Lloyds, HSBC, Bank of America, BlackRock, Deutsche Bank and Standard Chartered.
To Hasten the Phase-Out of Fossil Fuel Finance, Study Recommends Targeting Biggest Banks
It may seem obvious that climate advocates should target the world’s largest banks financing fossil fuel production, but a new study in Nature offers even more reasons for such a strategy. One reason that fossil fuel financing continues to increase despite net-zero pledges by many large banks is the role of syndicated lending networks — which enable deals too large for any individual bank to shoulder and spreads out the risk. This has helped extend fossil fuel production since finance from “domestic banks in countries with stronger climate policies can be substituted by finance from foreign lenders.” To counteract this trend, the study’s authors suggest regulation that limits bank holdings and activities in the fossil fuel sector.
Biden May Push for Fossil Fuel Funding Restrictions Before Trump Takes Office
When he took office, President Biden promised to work towards ending public support for the global fossil fuel industry. Now, with just over a month left in the White House, his administration is considering fulfilling that vow by showing its support for an international agreement to limit export credit agency financing — through loans and guarantees — for most oil and gas projects, reports Bloomberg. The agreement would vastly expand an existing ban on such support for coal-fired power plants. Climate advocates note that such a move could help blunt Trump’s efforts to undo Biden’s climate agenda, such as Trump’s promise to once again exit the Paris climate agreement.
Estimated 96% of Oil and Gas Companies Exploring and Developing New Reserves Around the World
The scale of the oil and gas industry’s expansion plans is “truly frightening,” says Nils Bartsch, head of oil and gas research at Urgewald, a German environmental and human rights NGO. The group recently analyzed industry databases and found that an estimated 96% of oil and gas companies are exploring and developing new reserves across 129 countries. That list includes countries like South Africa, Namibia, Mozambique and Papua New Guinea that don’t have much existing production. In addition, the analysis revealed that 40% of the companies are developing or expanding new coal mines or supporting their infrastructure.
Financial institutions have played an outsize role in recent growth, with the world’s 60 biggest banks plowing $6.9 trillion into the fossil fuel industry in the last eight years. “The financial system is absolutely the most important thing in terms of achieving the Paris Agreement,” Franziska Mager, senior researcher at Tax Justice Network, a U.K. advocacy group, told Deutsche Welle. “It is the foundation on which everything else rests.”
In a First, a North American College Financially Disassociates Itself From Fossil Fuel Funding
The University of Toronto’s School of the Environment recently said it will no longer accept funding from fossil fuel companies — in the form of donations for buildings and infrastructure, scholarships and seminars — becoming the first academic institution in North America to make such a commitment, reports The Varsity student newspaper. That doesn’t prevent researchers from getting funding from such companies, notes a spokesperson.
