U.S. government makes proposal that could limit bank pullback of Arctic oil, gas funds

In this file photo, caribou from the Porcupine Caribou Herd migrate onto the coastal plain of the Arctic National Wildlife Refuge in northeast Alaska. (U.S. Fish and Wildlife Service/Associated Press)
It follows move by large U.S. banks that plan to ban or limit investments in Arctic oil and gas projects

The U.S. federal government has released a proposed rule aimed at limiting the ability of large banks to pull financing from Arctic oil and natural gas projects.

The proposal issued last Friday follows announcements by five of the nation’s largest banks that plan to prohibit or limit investments in the projects, including those in the Arctic National Wildlife Refuge, the Anchorage Daily News reported.

Some experts and activists said the rule’s potential impact could be muted if banks can show that opting out of Arctic oil projects is a financial decision, rather than a political strategy.

Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Wells Fargo & Co. and Morgan Stanley have announced intentions since late last year to pull back from Arctic oil and gas projects.

The banks’ updated policies followed pressure from conservation groups concerned about climate change. BlackRock Inc., the world’s largest asset manager, urged companies early this year to emphasize steps they are taking to combat global warming.

Brian Brooks, acting comptroller of the federal Office of the Comptroller of the Currency, an independent bureau within the Department of the Treasury, said the banking system’s capital and services must be accessible to everyone on equal terms.

Banks can decline to support individual projects or customers based on reviews of risk, Brooks said.

‘Dangerous’ to Alaska’s economy: letter

The proposed rule follows a letter in June from Alaska Republican Sens. Dan Sullivan and Lisa Murkowski and Alaska Republican Rep. Don Young to the head of the Federal Reserve, the comptroller of the currency and the chair of the Federal Deposit Insurance Corp.

The policies of the financial institutions may discriminate against Alaska First Nations who rely on the oil and gas industry for their livelihoods, the letter said.

“This trend of big banks blackballing Alaska investment is dangerous to Alaska’s economic future,” Sullivan said in an interview Friday.

The comptroller’s office did not analyze whether discrimination against Alaska First Nations or other groups happened because of the banks’ policies. But the policies affect Alaska’s Indigenous population and other people who work with the North Slope oil industry, Brooks said.

During the analysis of bank policies concerning oil and gas, the agency found that large banks have also stopped providing lending and financial services in other sectors including coal mining and firearms manufacturing, Brooks said.

Related stories from around the North:

Canada: Indigenous leaders applaud most recent Canadian bank to nix financing Arctic oil and gas, Eye on the Arctic

Finland: The Arctic Railway – Building a future, or destroying a culture?, Eye on the Arctic

Iceland: Indigenous wildfire knowledge to be key part of new Arctic Council project, Eye on the Arctic

Russia: Russian Indigenous groups call on Elon Musk to boycott company behind Arctic environmental disasters, The Independent Barents Observer

United States: Canadian Gwich’in leaders and conservationists suing U.S. over leasing program for Arctic wildlife refuge, CBC News

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