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, one of the top 10 natural-gas-producing states in the country, is experimenting with a new process to keep the gas in the ground when it can’t be transported, sold or shipped through a pipeline. Rather than flare or vent the gas, three companies are testing a way to recapture the gas and reinject it into an active oil well. The pilot program was approved by the state’s oil conservation regulatory agency, but so far it’s not clear if the process is reducing greenhouse gas emissions at all, which is essential given the state’s overall rising emissions. With the state already underfunding enforcement of its climate regulations, The Slick’s Jerry Redfern wonders if it can effectively monitor this new oil field process.
Former UN Climate Chief: Keep Fossil Fuel Companies Away From COP28
Fossil fuel companies should not be included in the upcoming COP28 climate summit if they keep blocking action on climate change, said Christiana Figueres, the former UN climate chief. For years, she had argued that oil and gas companies needed to be part of climate policymaking discussions. But recently she’s had a change of heart amid energy giants pulling back on climate pledges, lobbying against new regulations and making record profits: “My patience ran out, and I say that with sadness,” she told reporters last week.
How Climate Change Is Changing Our Literature and Poetry
Climate change may be even having an impact on our literature and poetry, notes Suzanne Lummis in her essay on how California writers like Joan Didion have long used the region’s blazes to create atmosphere. But as wildfires worsen and the climate changes, is that still possible? “Never again in our stories, our poems, can the fires in the hills together with the warmth of the night air or briskness of the sea air invoke that swooning Southern California mood, nor an edginess either, that interesting sense of unease,” she writes. Her essay is part of “Poets on the Beat,” a collaboration between Capital & Main and the Beyond Baroque Literary Arts Center, in which distinguished California poets provide new perspectives on such topics as climate change, inequality, the immigrant experience and police violence.
Banks Have Helped Fossil Fuel Companies Raise More Than $1 Trillion Via “Hidden” Financial Support
In the wake of the Paris climate agreement, many leading global banks pledged to work toward net-zero emissions, but since then, they have helped fossil fuel companies raise more than $1 trillion from the global bond markets, according to an investigation by The Guardian. The bonds, issued by oil and gas and coal producers to help finance specific projects or their general operations, are a form of “hidden” financial support to energy giants that have helped increase the world’s carbon emissions. Banks earn fees by underwriting and marketing such bonds to their clients and investors — and guarantee their sales by buying and then later selling them to global investors. And such bonds have become the primary source of capital for the fossil fuel industry, as shown below:
Goldman Sachs CEO: We Will Continue to Invest in Oil and Gas “For a Long Time”
In 2021, Goldman Sachs pledged to align its financing activities to support a net-zero target by 2030. Yet its chief executive this week refused to yield to pressure to stop financing oil and gas companies. “Traditional energy companies are hugely important to the global economy, they are hugely important to Goldman Sachs,” David Solomon said at the American Energy Security Summit in Oklahoma City, as quoted by Bloomberg. “We are all going to continue to finance traditional companies for a long time.” Solomon added that supporting oil and gas companies is essential because without energy security, “society won’t function.”
“Forgotten Exemption” May Spare Oil and Gas Private Equity Funds From New SEC Disclosure Rule
Private equity firms and hedge funds have tangled with the Securities and Exchange Commission over new rules requiring more disclosure of their activities, saying that it intrudes on relations with their investors and adds new costs. But oil and gas funds could be exempt from those requirements due to an obscure section of the 1940 Investment Company Act, lawyers tell Hart Energy. As a result, oil and gas funds won’t be limited in the type or number of investors they take nor bound by rules that limit investors to those with at least $5 million or institutions with at least $25 million.
Norway’s Oil-Rich Sovereign Wealth Fund: Net-Zero Transition Is Not Happening Fast Enough
A top executive at Norges Bank, Norway’s sovereign wealth fund, which is flush with $1.4 trillion largely from oil profits, says that companies are not transitioning fast enough to meet net-zero targets by 2050. Carine Smith Ihenacho pushed for a complete overhaul of the global energy system, saying businesses need to do more to reduce their reliance on fossil fuels and switch to renewable energy sources. Critics have pointed out that Norges Bank still has investments in fossil fuels — 1% stakes in Exxon Mobil and Chevron, and 3% stakes in Shell and BP — and that just 23% of the companies in which it invests have net-zero targets, reports Oilprice.com.
“Sustainable” Funds Have Benefited Energy Giants Like Chevron and BP
Many banks and asset management firms offer sustainable funds that purport to finance eco-friendly businesses — but via “clever semantic tricks and loopholes,” those funds have helped back oil and gas giants, according to an analysis by Voxeurop. They examined four sustainable funds offered by Eurizon, an asset management firm controlled by Intesa Sanpaolo, the largest bank in Italy. The firm bought shares in Eni, Enel, Repsol, Chevron, TotalEnergies, BP and Shell for more than €208 million and put them in the portfolios of its “sustainable and responsible investments.” Those energy giants have brought in almost €7 billion in investments by being included in such green funds, according to the news outlet’s analysis of data from Refinitiv, a financial information database. “These companies have an interest in getting into ‘green’ funds because they will receive more funding that way,” explains Fabio Moliterni, a specialist at the ethical finance company Etica SGR.
