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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As the two biggest states in the country, California and Texas have a pivotal role in the battle to slow down climate change. But as the U.S. gets closer to 2030, the pivotal date by which emissions need to be reduced by 45% per the Paris Agreement adopted at the 2015 U.N. Climate Change Conference, the example of both states shows why that goal seems increasingly out of reach.
As the biggest oil-producing state and one that is defiantly proud of that status, Texas isn’t doing much to change its role as the country’s biggest emitter of the greenhouse gas carbon dioxide. Even when it comes to one source of pollution that’s entirely preventable — methane that is wasted through flaring, venting or leaking — the state seems unwilling to take action. As The Slick’s Elliott Woods reports: “While there are no federal or state regulations for methane as a greenhouse gas in Texas, the Railroad Commission — the state’s oil and gas regulator — does have regulations for when flaring is permissible and when it isn’t. But nonpermitted flaring occurs at hundreds of locations across the state, with few consequences for the producers.”
Meanwhile, many California leaders, including Gov. Gavin Newsom, have been outspoken about their ambitious approach to curbing climate change, yet the fossil fuel industry and its legislative allies keep getting in the way. For the second time, a bill requiring corporations to report their greenhouse gas emissions – which could set off a wave of similar transparency bills, building pressure on companies to reduce their emissions — could fail in the state’s Legislature thanks to a handful of moderate Democrats, reports The Slick’s Aaron Cantú.
Other states don’t seem prepared to regulate new potential sources of emissions — particularly energy-intensive crypto mining. Pennsylvania is seeing the emergence of a bitcoin mining industry, which could lead to a spike in the state’s energy use and emissions, spurred by companies attracted by a sales tax exemption originally intended for data centers. A bill to remove that exemption for crypto players is currently being debated in the state’s Legislature, where it is opposed by the industry and its allies, reports Audrey Carleton.
Temperatures Spike, Profits Soar, Climate Pledges Wither
While July was the hottest month on record, accentuating the urgency of the climate crisis, oil and gas majors reported huge second-quarter profits. Though sharply down from its record-breaking earnings a year ago, BP still generated $2.6 billion in profits and a 10% dividend increase for shareholders while Shell reported $5.1 billion in profits and a 15% dividend raise. Earlier this year BP pulled back on its climate commitments, aiming for a less ambitious reduction in coal emissions than it had previously promised.
Barclays Faces More Pressure to Cut Ties to Fossil Fuel Industry
One of England’s largest banks, Barclays, is under increasing pressure to stop funding the fossil fuel industry. Last month, the charity Christian Aid announced that it would no longer do business with the bank, and now the esteemed National Trust conservation charity is being encouraged to do the same. Dominic Acland said that his grandfather, who gave the family’s 17,000-acre ancestral estate to the charity almost a century ago, was an environmentalist who would be “horrified that the National Trust is banking with Barclays.”
The bank says it aims to reduce its financed emissions by 40% by 2030 and be “net zero” by 2050, but it continues to finance new oil and gas projects, unlike its competitors HSBC, Lloyds and NatWest. The resistance of some banks to financing oil and gas is leading to a cash crunch in the U.K.’s energy sector, especially among smaller producers in the North Sea that depend on loans.
Green Search Engine Aims to Expose Greenwashing With New Tool
A search engine based in Berlin is using its platform to expose major financial institutions that support the fossil fuel industry. Ecosia, which dedicates 100% of its profits to environmental causes, is adding its fossil fuel icon tool to the websites of 32 banks such as Bank of America and JPMorgan Chase that have each invested or funded over $50 billion in fossil fuel operations. Using data from the Banking on Climate Chaos report, the tool provides details on the banks’ financing activities and stories illustrating the negative impact of such energy production on communities around the world. It aims to expose greenwashing by financial institutions and inform users of more sustainable choices such as climate-friendly banks. “At Ecosia, we take the view that the public is provided with too little — if next to no — information about if and how their bank is financing and fueling the climate crisis, via direct funding for fossil fuel initiatives,” says Dr. Ruben Korenke, product manager of the Green Team at Ecosia.
Hydrogen’s Future as Transition Fuel — Potentially Expensive and Less Green
Singapore could prove a testing ground for the future of hydrogen as a transition fuel on the way to a green economy. Hydrogen could supply up to half of the island nation’s power needs by 2050, according to a national strategy paper released last October. But analysts are warning that such a plan could prove costly and face credibility issues, since its definition of “low carbon” hydrogen includes both renewables-based “green” hydrogen and “blue” hydrogen derived from methane produced by natural gas. This could prolong the use of fossil fuels, notes a study by Asia Research and Engagement (ARE). The Biden administration has promoted the development of hydrogen hubs throughout the U.S., and the “hydrogen economy” is being touted as the next step of the global energy transition in many other countries.
Phasing Out Coal Is Proving More Difficult Than Expected
It’s proven easier to stop development of new coal plants than it is to phase out existing plants. In Asia, where coal accounts for a third of the region’s total emissions, banks and financial institutions have proven an obstacle to getting rid of such plants. In Indonesia, about 75% of coal plants were built after 2005 and could keep burning the fuel for decades, notes the Straits Times. One 11-year-old coal power station in West Java illustrates the challenge. Cirebon-1, which powers the nearby city of the same name, was set to close but its existing investors and financiers such as HSBC have been negotiating a phase-out deal for months without any resolution in sight. Meanwhile, the plant keeps running, releasing more airborne toxins and pollutants.
Oklahoma Cuts Its List of Banned “Woke” Banks in Half
Earlier this year, the state of Oklahoma said it would stop doing business with banks it deemed “woke” for allegedly boycotting the oil and gas industry. These 13 banks made the list — GCM Grosvenor, Lexington Partners, Firstmark Fund Partners, Stepstone VC Global Partners, WCM Investment Management, William Blair, Actis, BlackRock, Wells Fargo, JPMorgan Chase, Bank of America, State Street Corp. and Climate First Bank — though some of them, such as JPMorgan and Wells Fargo, are among the world’s biggest financers of fossil fuel production. Now, that list has been whittled down to BlackRock, Wells Fargo, JPMorgan Chase, Bank of America, State Street Corp. and Climate First Bank, most of which still are involved in such financing and are only on the list because they failed to respond to a questionnaire sent out by the state and are “presumed to be boycotting,” said State Treasurer Todd Russ.
