Trump's last-minute push to force Arctic Refuge drilling
Trump's last-minute push to force Arctic Refuge drilling
Banks don't want to finance oil drilling in the Arctic. Trump is trying to make them consider it anyway.
I listen to public radio pretty much all day while I’m working. Last week, I got to appear on one of my favorite programs of all time to talk about Biden’s climate plan. The program is Science Friday from WNYC. You can listen by clicking the button below.
The segment also features climate reporter extraordinaire Rebecca Leber of Mother Jones. Rebecca and I used to cover climate change together at ThinkProgress in 2013. It was cool to share the time with her. You can find Rebecca on Twitter here.
Now news!
Trump’s last-minute push to end the 40-year Arctic drilling war
The last four years have been difficult on the climate front, thanks in part to Donald Trump. But climate activists have been still able to achieve some significant wins—namely, convincing some of America’s biggest banks to prohibit financing drilling projects in the Arctic National Wildlife Refuge.
Over the last several months, five of the six largest banks in the United States have vowed to restrict lending to the oil industry for new development in the Arctic: Morgan Stanley, Wells Fargo, Goldman Sachs, JPMorgan Chase and Citigroup. The only major U.S. bank that hasn’t pledged keep their money out of Arctic drilling is Bank of America.
It’s not just U.S. institutions backing away from drilling in the Arctic Refuge. Barclays, National Australian Bank, The Royal Bank of Canada, and BNP Paribas have implemented similar policies. Overall, more than 24 financial institutions have promised not to fund new Arctic oil development, according to the CBC.
These moves by banks didn’t happen on their own. They came after years of “activism and pressure from Indigenous activists, conservation organizations, the public and their customers.” (Paid subscribers learned about the indigenous-led activism behind these bans last year via a conversation with Sierra Club campaigner Ben Cushing).
But now, these wins are in danger of being artificially reversed by the Trump administration, as part of its last-ditch attempt to sell off the sensitive Arctic region to oil and gas companies before Joe Biden takes office.
New rule: Banks can’t “discriminate” against fossil fuel corporations
On Friday, the Office of the Comptroller of the Currency proposed a new rule that would prohibit banks from refusing to lend to entire categories of businesses, the Wall Street Journal reported. “We need to stop the weaponization of banking as a political tool,” Brian Brooks, the acting comptroller of the OCC, told the Journal. “It’s creating real economic dislocations.”
Brooks’ new rule technically applies to a broad range of industries. But it’s “designed to prevent banks from cutting off funding to the fossil fuel industry,” according to Gregg Gelzinis, a senior economic policy analyst at the Center for American Progress.
Indeed, the proposal follows months of complaints by the fossil fuel-backed members of Alaska’s Congressional delegation about banks’ decisions not to fund oil development in the Arctic. They’ve been accusing the banks of “discrimination” against the oil industry, and asking Trump to do something about it.
In April, Alaska Senator Dan Sullivan told Trump that the banks’ decisions “discriminate against a critical sector of the U.S. economy.” Trump replied: “You cannot be discriminating against these great energy companies.”
The concept is laughable to activists who’ve been working on the issue. “We’re not talking about a protected class of people,” Cushing, the Sierra Club campaigner, told The Hill. “We’re talking about fossil fuel corporations.”
Whether the rule is rational or not, it still could be finalized before Biden takes office. It will “be subject to public comment until Jan. 4 before it can receive final approval,” the Journal reports, “leaving a narrow window for Mr. Brooks to complete the measure before President Trump leaves office on Jan. 20.”
A “last gasp” from Brooks to “satisfy” Trump
The OCC is tasked with regulating and supervising the national banking system, and is technically an independent bureau of the Treasury Department. But climate activists don’t see Brooks as acting independently.
“This proposal is a dangerous last gasp from a regulator who is desperately trying to satisfy President Donald Trump and fossil fuel-backed members of Congress,” Gelzinis said in an e-mailed statement.
Brooks’ announcement of the new rule comes just days after Trump announced he would promote Brooks from acting administrator to “to a full five-year term leading the federal bank regulator,” the Hill reports. The Senate has just 16 calendar days to confirm him.
If Brooks were confirmed, Biden could easily fire and replace him—and is largely expected to. But if the Senate remains in Republican hands after the run-off elections in Georgia, Biden “may be reluctant to remove [Brooks] out of concern that GOP leaders will then block Biden nominees for the OCC and other positions,” American Banker reports.
Indeed, one former Republican Senate staffer told the publication that he “expects Biden would at least wait several months before trying to fire Brooks, because the OCC likely isn’t an early priority for the new administration.” Biden, in other words, may have to pick his battles—and considering how many he’ll have, firing the head of a relatively obscure Treasury bureau may not be at the top of the list.
Just the latest lame duck move to fast-track Arctic drilling
The OCC rule is just the latest move in the Trump administration’s effort to fast-track drilling in the Arctic National Wildlife Refuge before he leaves office, and end the 40-year battle to preserve one of the last areas of untouched wilderness in the United States.
Just last week, the Trump administration “announced that it would begin the formal process of selling leases to oil companies” in the Arctic Refuge, the New York Times reported. “That sets up a potential sale of leases just before Jan. 20, Inauguration Day, leaving the new administration of Joseph R. Biden Jr., who has opposed drilling in the refuge, to try to reverse them after the fact.”
The oil industry’s largest and most powerful trade group is, naturally, thrilled:
The American Petroleum Institute, an industry group, said it welcomed the move. In a statement, the organization said that development in the refuge was “long overdue and will create good-paying jobs and provide a new revenue stream for the state — which is why a majority of Alaskans support it.”
Alaskans, however, do not hold sole ownership of the Arctic National Wildlife Refuge. It is public land owned by all Americans—and the overwhelming majority of Americans do not support drilling in the Arctic National Wildlife Refuge.
In fact, the majority of Americans, “including large majorities of Republicans and Independents, overwhelmingly support banking policies that reject funding for Arctic oil and gas, including in the Arctic Refuge.”
Rigging the market for fossil fuels
The Arctic Refuge is an extremely ecologically sensitive region. The consequences of new drilling would be severe for indigenous people, wildlife, and the climate. Because of low oil prices, Arctic drilling also doesn’t look like a great financial investment in general.
Banks can still reject funding for drilling projects in the Arctic under Trump’s new OCC rule. “The law is not designed to force banks to invest in projects that they deem to be overly risky and not good investments,” Cushing told the Hill. It just means banks can’t issue blanket policies prohibiting funding for new Arctic drilling. In other words, if an oil comes to them with a proposal, banks have to consider it.
It’s yet another way Trump and the Republican Party artificially rig the market in favor of fossil fuels, despite claiming they want to “let the market decide” when it comes to renewable energy. The U.S. currently pays at least $20 billion in subsidies to the fossil fuel industry each year, with about 80 percent going to oil and gas. Renewable energy receives no comparable support.
If Republicans truly wanted to let the market decide, Cushing said, they wouldn’t be actively preventing banks from making their own financial decisions.
“Contrary to the claims of oil-backed politicians, banks don't want to finance more drilling in the Arctic not because of some vast liberal conspiracy, but because it's bad business,” Cushing said in a statement on Friday. “The idea that this constitutes discrimination is ludicrous. No amount of saber-rattling in the final days of the Trump administration is going to change the fact that Arctic drilling is a risky investment that any savvy financial institution would stay far away from.”
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More climate headlines: Trump’s G20 speech, more bad bird news, a “green industrial revolution”
Trump used his final presidential appearance at an international summit to trash the Paris climate accord and tout fossil fuels. “President Donald Trump railed against the Paris climate accord and touted American oil and natural gas production during a virtual session focused on safeguarding the environment on the final day of the Group of 20 summit,” CNN reported on Sunday:
Trump's speech on the environment, which was pre-taped from the White House, provided an apt end to his four years of disagreements on the issue with fellow world leaders. In it, Trump called the 2015 Paris agreement "one-sided" and claimed it was designed to inflict ruin on the US economy.
"The Paris accord was not designed to save the environment, it was designed to kill the American economy," he said, speaking from the Diplomatic Room. "I refuse to surrender millions of American jobs and send trillions of American dollars to the world's worst polluters and environmental offenders, and that's what would have happened."
Trump, of course, did not mention that climate change is also projected to destroy the American economy. Scientists estimate unchecked climate change could cost the world anywhere from $70 trillion to $486 trillion—or, put another way, up to half a quadrillion dollars. BuT hOw WiLL wE pAy FoR a GrEeN nEw DeAL??
Meanwhile, the U.K. is promising a “green industrial revolution.” Solving climate change means investing in a green economy, which—spoiler alert!—means creating new jobs. Trump hasn’t realized that, but the U.K.’s version of Trump has. “Britain will ban the sale of new gasoline and diesel cars by 2030, a decade earlier than its previous commitment, the prime minister said Tuesday,” E&E News reports. “Boris Johnson made the pledge as part of plans for a ‘green industrial revolution’ that he claims could create up to 250,000 jobs in energy, transport and technology.”
But talk is cheap, which is why BIPOC climate activists occupied the DNC last week. “A coalition of grassroots groups, Black, Indigenous, and Brown leaders from across the nation occupied the Democratic National Committee Headquarters in Washington for 24 hours to demand that President-Elect Biden and his administration follow through on a bold agenda to address the climate crisis,” reads a press release from the Indigenous Environmental Network. “They were joined at an afternoon rally by members of Congress who are leading the effort in the House and Senate to hold the incoming administration to its promises.” Photos and videos from the event here.
The lame duck is taking aim at the sage grouse. “The Trump administration announced plans Thursday that ease protections for sage grouse in the West, prompting an outcry by critics who say the move paves the way for widespread mining and drilling and ignores a federal court ruling,” the Associated Press reports. This follows our report from last week that great tits (the songbird, you cad) may face extinction if warming goes unaddressed.
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As it was with the Keystone XL extension. Obama killed it not because of environmental concerns, but because it wasn't economically viable.
This is another example of why although we need to fight on all fronts, putting a price on climate pollution is a critical tool to include in the mix. No bank would consider financing Arctic fossil fuel development if there was no profit in doing so.
Here's how to kick the profit out of the fossil fuel energy equation: http://citizensclimatelobby.org/basics-carbon-fee-dividend
It is also the most equitable way to transition to a global clean energy economy: http:// carboncashback.org/benefits