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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The transition to a clean-energy future is proving to be more complicated, messy and politically fraught than many of us expected — as reported in recent stories by Capital & Main’s Slick team.
Crypto Mining Offers Second Life to Old Gas Wells, Raising New Concerns
Dying gas wells in Pennsylvania are getting a second life via companies that are converting them for bitcoin mining, with one major player, Diversified, buying up 70,000 wells in less than a decade. Yet the bitcoin mining boom is raising concerns among residents since the activity has been linked to air pollution and uses up more electricity than some entire countries. So far, two of the company’s mines have been cited for operating without the proper permits. Emails obtained by Capital & Main’s Audrey Carleton show the company was less than transparent with regulators about its plans or with its neighbors about its operations, highlighting a lack of sufficient regulatory oversight in Pennsylvania.
Texas Faces Glut of Unplugged Wells and Dirty Oil Fields but Starts to Take Action
Of the nation’s 2.6 million unplugged wells, almost one-fifth of them are in Texas — presenting a problem for the state since such wells can cause water and air pollution, making it more difficult to reach critical carbon reduction goals. It’s very expensive to clean up these oilfields but Texas is starting to take action, using a combination of federal and state funds to accelerate its well-plugging program. And state lawmaker Brooks Landgraf is pushing to increase funding for oilfield cleanup in an effort to rehabilitate areas like the infamous “Death Highway,” a dangerous route known for its heavy oilfield traffic. As Capital & Main’s Elliott Woods reports, it’s an enormous challenge, partly exacerbated by the state’s method of prioritizing which wells to plug.
Hydrogen ‘Experiment’ Coming to Small Farmworker Community in California
Lawmakers and industry groups have high hopes for hydrogen as a transition fuel, aiming to lower greenhouse gas emissions by blending it with natural gas. But the solution remains controversial, since the method risks increasing nitrogen oxide inside of homes, which can cause damage to lungs, and it can leak into the air. As Capital & Main’s Aaron Cantú reports, the testing ground for this method, which has been heavily pushed by SoCalGas for a decade and rejected by wealthy communities, will be Orange Cove, a small Latino town in the San Joaquin Valley. The giant utility said that it will regularly monitor the area, which would be one of the largest hydrogen blending sites in the world, for leaks. Many in the small town, where picking and packing produce is a way of life, seem to know little about the hydrogen blending plan. “It is extremely upsetting to know that our disadvantageness is being acknowledged and kind of exploited,” said resident Evelyn Morales.
Emails Show Energy Lobbyist Pushing Pennsylvania Governor to Support Tax Credit for Hydrogen Plan
Hydrogen is also key to a Pennsylvania proposal to make money off its coal mines, many of which are abandoned, by capturing methane released at those sites and selling it to hydrogen producers in the state. Much of the plan depends on a tax credit, intended to speed up the transition to clean energy, included in President Biden’s Inflation Reduction Act. To push things along, a lobbyist for energy company CNX Resources reached out to Pennsylvania Gov. Josh Shapiro’s office for its support. Soon, the request was forwarded to Shapiro’s aides in Washington, D.C., in an email referring to the lobbyist as a “friend,” reports Carleton.
Plan to Create Hydrogen Ecosystem That Crosses Navajo Nation Stirs Up Controversy
And in New Mexico, the state’s top officials, including Gov. Michelle Lujan Grisham, are planning a giant hydrogen ecosystem — with production, transportation, power generation and carbon sequestration projects — in the northwest corner of the state. Anchoring the effort is Tallgrass Energy, an energy giant with more than 7,000 miles of natural gas pipelines across the country. The all-out support is alarming some critics, who fear that the process can produce greenhouse gases like carbon dioxide and methane, as well as nitrogen oxide, which is harmful to human health. And the project is causing tension within the Navajo Nation, across which a proposed hydrogen pipeline would stretch, where some see an economic boost and others worry about potential environmental damage, reports Capital & Main’s Jerry Redfern.
Is Oil and Gas Produced in Colorado Really Cleaner Than Most? It’s Not Clear.
And Capital & Main’s Jennifer Oldham digs into oil and gas company claims that their production in Colorado is cleaner and less polluting than most other operations in the world. The assertion has had an impact — cited by oil and gas companies to win support for drilling new wells in the state and to fight off a legislative effort to phase out drilling. Yet the state’s fossil fuel industry “will fall short of future greenhouse gas reduction goals without additional efforts to curb pollution,” according to interviews and public records, writes Oldham. As one example, the air quality in the Denver metropolitan area has repeatedly failed to meet federal standards.
Banks Won’t Hit Net-Zero Targets, Says Consultant
Banks, insurers and asset managers seem ever more convinced that they will not achieve ambitious net-zero targets by 2050, according to an energy consultant who specializes in sustainability. Garrett Delk of Pickering Energy Partners cites the fact that financial firms are quitting multinational climate associations like the Net Zero Banking Alliance and Net Zero Insurance Alliance and that energy security has become a major theme in geopolitics. He also foresees a growing dichotomy between Europe and the U.S., with American regional banks increasing their lending to oil and gas companies while their European rivals pull back from that sector. He cites the example of a regional bank that joined two other lenders in taking over a $325 million Barclays loan to a fracking company. He concludes: “For U.S. fossil-fuel borrowers, the development means they will be able to continue to access credit at prices that remain competitive and varied.”
Another Giant Bank Says It Won’t Issue Bonds for Oil and Gas
Crédit Agricole recently joined its French competitor BNP Paribas in announcing that it would no longer get involved in issuing bonds for oil and gas companies. The move was hailed by climate activists since the bank is one of the largest in the world and Crédit Agricole has financed projects by energy giants TotalEnergies and Eni. “While other global banks are backtracking on their climate commitments or showing no sign of weakening their support for the biggest polluters, BNP Paribas and Crédit Agricole are taking a further step towards respecting the scientific consensus on the imperative of halting oil and gas expansion,” said Reclaim Finance, a climate NGO in Paris. The group did note two major loopholes, however: The announcement covers only conventional bonds and not corporate loans, and it does not impact financing for companies involved in transport infrastructure for oil and gas projects.
Shareholders Are Pushing for Greater Climate Transparency From Banks
New York City Comptroller Brad Lander and the New York City Public Pension Boards (NYCERS) recently pushed banks to be more transparent about the progress they’re making towards their net-zero commitments in a series of six shareholder proposals. One resolution called for each bank to regularly disclose its ratio of financing of renewables over fossil fuels (per the Paris Agreement, banks must use $4 to support renewable energy for every $1 spent financing fossil fuels by 2030). In response, three banks — JPMorgan Chase, Citigroup and Royal Bank of Canada — agreed to disclose those ratios.
These Are the Most Environmentally Friendly Banks
Amid the overall increase in bank financing of fossil fuel projects around the world, some American banks stand out for their climate friendly policies. These are the banks that made the list at Business Insider:
- Amalgamated Bank — which has pledged “to not lend to fossil fuel companies” and says that 32% of its loan portfolio goes to “climate solutions.”
- Atmos Financial — which says that it allocates 100% of its loans to clean energy projects.
- Clean Energy Credit Union — it has vowed not to invest in fossil fuel projects and says that it finances a plethora of clean-energy projects from solar PV projects to electric vehicles.
- Spring Bank (NYC) — which says that it recently went carbon neutral and offset over 192,874 kg of CO2e (carbon dioxide equivalent).
Canadian Proposal Would Force Banks to Pull Back From Fossil Fuel Financing
Canadian lawmaker Rosa Galvez is pushing legislation to force banks and pension funds in the energy-rich country to stop financing the oil and gas sector. That includes “enforcing science-based targets and holding financial institutions accountable to them” and preventing conflicts of interest on bank boards, she explains. The Climate-Aligned Finance Act has caused tremors throughout the country, where the banks have financed $104 billion worth of fossil fuel projects in 2023. Recently, an executive of the Canadian Bankers Association slammed the legislation, saying it essentially bans lending to fossil fuel companies.
