Welcome to “Feet to the Fire: Big Oil and the Climate Crisis,” a biweekly newsletter in which we share our latest reporting on how the fossil fuel industry is driving climate change and influencing 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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The second time’s the charm for environmentalists and their allies in California, where a potentially far-reaching climate disclosure bill that failed last year was able to buck an army of industry lobbyists and pass the legislature this month. The legislation would set a precedent by requiring large companies to disclose their total greenhouse gas emissions, potentially accelerating the fight against climate change within the state as well as across the nation. Experts tell Capital & Main’s Andy Furillo that “this is really a national bill,” because nearly every large company in the United States that does business in California will be forced to report its emissions. At Climate Week in New York, Gov. Gavin Newsom announced that he would sign the bill into law.
The legislation faced fierce opposition from industry lobbyists, including some well-connected former legislative aides who pressured lawmakers with “myth after myth after myth,” according to Mary Creasman, CEO of California Environmental Voters. The bill requires large businesses to report their own direct and indirect emissions — as well as those of upstream suppliers and downstream customers. Opponents claimed that such requirements placed an undue burden on companies and their suppliers. It’s not yet clear how the industry will respond to the bill.
In Colorado, an infusion of federal money is fueling a growing number of clean energy projects. As Jennifer Oldham reports, funds from the Inflation Reduction Act (IRA) are being augmented by state and local support, jump-starting wind and other clean tech buildouts. The boom has led to the creation of thousands of jobs, with a lot more on the way — and is playing out largely in districts represented by Republicans who opposed the IRA.
Demanding Transition to Clean Energy Is Like Asking “Homeless … to Diet,” Says Oil Giant
While global leaders and climate activists and journalists clustered in New York this week to talk about ways to combat climate change, energy giants gathered in Calgary, Canada, at the annual meeting of the World Petroleum Congress. One of the main themes at the event was the eagerness of many governments from Indonesia to Ghana to ramp up their oil and gas production — and their concern about mandates for renewable energy. The demands of the transition to clean energy are tantamount to “suicide” for oil and gas producers in West Africa, said Osvaldo Inácio, board member of Angola’s national oil company, Sonangol, reports Hart Energy.
Referring to the International Energy Agency’s pathway to net zero emissions — which has asserted that “no new oil and natural gas fields are needed” — Inácio declared as a comment on the tension between reducing fossil fuel production and the economic needs of the Global South: “Whether I would actually consider stopping production at all will be the same thing as you asking a homeless person to go on a diet.”
Fed Pressured to Require Banks to Stop Funding Fossil Fuel Projects
Several lawmakers, including Sen. Ed Markey and Rep. Alexandria Ocasio-Cortez, demanded on Monday that the Federal Reserve require financial firms to halt their funding of fossil fuel projects to “protect the stability of the financial system.” They emphasized that not taking the climate into account in the Fed’s oversight of institutions is a huge risk for the U.S. government — noting that climate-related events like wildfires and heat waves cost the U.S. economy more than $617 billion between 2018 and 2022, and $177 billion in 2022 alone. The lawmakers added that the Fed’s climate risk proposals “fall short” and that the Fed ranks near the bottom of central banks in nonprofit research group Positive Money’s Green Central Banking Scorecard. In a tweet, Markey said, “Big banks are financing fossil fuels and fanning the flames of climate chaos.”
Lack of Progress on Sustainable Development Goals Dominates United Nations Summit
One stark reality that dominated the U.N.’s first Climate Ambition Summit this week is the lack of progress on sustainable development goals. In June, the U.N. noted that, at the current pace, none of those goals will be achieved by 2030. And recently, it was revealed that the huge funding gap when it comes to achieving those goals increased last year, partly due to inflation stemming from the impact of the pandemic and the invasion of Ukraine. Though there was a chance to bolster the transition to a green economy in the design of pandemic-related economic stimulus packages, that opportunity was largely missed because most of the funding on energy and transportation went to fossil fuel giants.
World Bank Slapped With Complaints Over Financing of Coal-Fired Plants in Indonesia
Amid reports that the World Bank plowed nearly $4 billion into oil and gas projects in 2022, local communities and nonprofits in Indonesia filed a formal complaint against the body’s lending arm, the International Finance Corporation (IFC), over its funding of two new coal-fired power plants in the country. Per the complaint, the IFC provided an equity investment of $15.36 million in 2019 to the Indonesian subsidiary of South Korean bank Hana, which is financing the project. The funding will help the Indonesian government expand the Suralaya coal-fired plant in Banten province, one of the biggest such plants in Southeast Asia. “The new … plants are expected to cause thousands of premature deaths and contribute more than 250 million metric tons of CO2 to the earth’s atmosphere,” said one of the nonprofits filing the complaint, Inclusive Development International (IDI).
French Banking Giant Pledges to Make Major Cuts to Oil and Gas Financing
French bank Societe Generale announced this week that it would cut in half its upstream oil and gas exposure by 2025 compared to 2019 levels — and by 80% by 2030. The financial giant, which has allocated almost $98 billion to fossil fuels since the Paris Agreement, also said it would launch a $1.07 billion transition investment fund that will “focus on energy transition solutions and nature-based and impact-based projects supporting [the] UN’s Sustainable Development Goals.” And it announced that starting in 2024, it will stop offering financial products and services dedicated to new oil and gas fields. Earlier this year, one of Societe Generale’s competitors, BNP Paribas, also announced that it would cut its oil extraction and production funding by 80% by 2030.
