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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New Mexico’s Oil and Gas Industry Could See Big Change With Slate of Bills
New Mexico, the country’s second-largest oil producer, failed to take steps last year to reform its fossil fuel industry. This year, with the beginning of the state Legislature’s session, lawmakers will see a half-dozen bills that could spell big changes for the oil and gas industry through new oil well placement restrictions, increased fines and higher royalty payments, among other possible shifts. The industry is keeping a close eye on the bills. A spokesperson for the New Mexico Oil and Gas Association tells The Slick’s Jerry Redfern that the group “and its industry members support legislation that is grounded in science,” noting that the oil and gas industry funds much of the state’s budget.
Decision to Scrap Resource Management Plans Confuses Both Enviros and Industry
Also in the state, a quietly announced decision by a regional office of the powerful New Mexico Bureau of Land Management united both environmentalists and oil and gas industry leaders — in confusion. The announcement that the Farmington office of the agency was scrapping work on a long-awaited update to the district’s resource management plans — which would have overhauled the playbook for vetting new oil and gas development over more than 4 million acres of federal, private and Native lands in northwestern New Mexico — “allows industry to move at the speed of last century’s status quo,” a Navajo conservation activist tells Redfern.
Pennsylvania Gov. Shapiro Promised 30% Renewable Electricity by 2030, But Little is Happening
When he took office, Pennsylvania Gov. Josh Shapiro was resolute in setting an ambitious goal — making sure that 30% of the energy sold in the state by 2030 would come from renewable sources, up from 8%. A year later, his office has provided no updates on what the administration is doing to reach that 30% goal, reports The Slick’s Audrey Carleton. That includes not taking a position on a bill in the Legislature that would update the state’s energy standards to require that 30% of its energy sales come from renewable sources.
Fossil Fuel Sector Loses Ground Again, Dragging Down Stock Market Returns
Oil companies reported a 30% decline in annual projects in 2023, with the sector posting an annual loss of almost 5%, according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA), which concluded that “it wasn’t just a bad year to invest in fossil fuels — but a bad decade.” The group’s energy finance analyst Dan Cohn said, “The era of stable, blue-chip returns from the fossil fuel sector is long gone.” In comparison, fossil-free equity indices are picking up steam and proving to be better investments. (See chart below.)
NYC Pension Funds Take Aim at Banks Over Fossil Fuel Financing
The day after Europe’s biggest pension fund, Dutch ABP, warned banks that they might divest in banks that continue financing fossil fuel projects, New York City took a similar step. City Comptroller Brad Lander and trustees of four NYC pension funds — New York City Employees’ Retirement System, Teachers’ Retirement System, Board of Education Retirement System and New York City Police Pension Fund — filed shareholder proposals with six major North American banks asking them to fully report their ratios of clean energy to fossil fuel finance and to speed up their stated goals of achieving net zero emissions. The six banking institutions are Bank of America, Citigroup, Goldman Sachs, Morgan Stanley, J.P. Morgan Chase and Royal Bank of Canada.
ING Threatened With Lawsuit Over Continued Financing of Oil and Gas
Dutch banking giant ING is the latest to be threatened with legal action over its continued investment in fossil fuel companies. Milieudefensie, the Dutch branch of the nonprofit Friend of the Earth, announced that it plans to sue the bank, claiming that its financing of fossil fuel projects has increased carbon emissions and contributed to global warming. Last year, climate activist groups sued BNP Paribas, claiming that the French bank’s financing of oil and gas companies violated a French law requiring companies to draft environmental damage vigilance plans. It was described by Oxfam as the world’s first climate suit against a commercial bank. That case is ongoing.
HSBC Accused of Reneging on Its Promise to Stop Financing New Oil and Gas Fields
Banking giant HSBC shocked the finance world and won plaudits from climate groups with its announcement in December 2022 that it would stop financing new oil and gas fields. But that same day, HSBC bankers began selling shares in Saudi Aramco, one of the biggest oil giants in the world, sources tell The Bureau of Investigative Journalism (TBIJ), adding that “the bank’s policy has been cleverly worded to allow it to fund some of the world’s biggest polluters while boasting about its green credentials.” Since the announcement, the bank has helped raise more than $47 billion for companies expanding the production of oil and gas, per TBIJ. In response, HSBC said its policy allows the bank to continue providing finance “at a corporate level” and its approach “is based on the latest science for achieving net zero and follows the UN-backed approach for climate target setting and net zero alignment for banks.”
Bank of America Backtracks on Its 2022 Vow to Stop Financing New Coal Projects
At the start of February, Bank of America, one of the largest financiers of fossil fuel projects in the world, echoed HSBC’s backtrack. Two years ago, Bank of America won praise from climate groups for announcing that it would stop financing new coal mines, coal-fueled power plants or Arctic drilling projects. But in its latest environmental and social-risk policy, it pulls back from those commitments, saying only that such projects will undergo “enhanced due diligence.” The move comes in the wake of intense attacks on “woke finance” from conservative lawmakers targeting banks for their environmental policies, the New York Times reported.
Barclays Says It Will Stop Financing New Oil and Gas Projects
And British bank Barclays took a step forward by announcing Feb. 9 that it will stop directly financing new oil and gas projects, as well as restrict lending to energy companies involved in fossil fuel production. The move was outlined in its Transition Finance Framework amid pressure from climate groups over its energy policy. Barclays was Europe’s biggest financier of fossil fuel projects between 2016 and 2022, according to the Rainforest Action Network. In response to the new announcement, nonprofit ShareAction said it was withdrawing a proposed shareholder resolution that pushed for the bank to halt its financing of such projects.
