In the last year, some big banks committed to protecting the Arctic National Wildlife Refuge in Alaska through withholding their investments from the Arctic as a whole. Seems like Alaska’s elected officials are pretty pissed about it. In fact, they’ve formally made a whole stink about the new environmental policies banks such as Goldman Sachs and JP Morgan Chase have rolled out.
In a letter dated June 16, that Politico obtained, Rep. Don Young, Senator Dan Sullivan, and Senator Lisa Murkowski wrote to offices with the Federal Reserve System, Comptroller of the Currency, and Federal Deposit Insurance Corporation pleading that they do something to stop these banks. It follows a similarly whiny letter on the same topic 36 Republicans sent to the White House last month. But the new letters go further both by begging for action and invoking the “benefits” oil and gas has had on Alaska Native communities to defend its argument.
This is a bit disingenuous given the role Alaska Natives have played in securing these commitments from banks (though it is true some Alaska Natives do support drilling). The letter goes on to say Arctic oil and gas is the U.S.’s way out of this coronavirus-fuelled economic slump. Really, though?
Let’s back up real quick. The administration opened up the Arctic National Wildlife Refuge’s 1.5 million-acre coastal plain to drilling in 2017 under President Donald Trump’s dumb arse tax bill. This was despite vocal opposition from the Gwich’in Nation, whose members consider the coastal plain sacred. State attorneys general and even nuns also called to not expand drilling. Since then, however, there’s been no luck in actually exploring for oil and gas due to regulatory delays and even a lack of ice that’s needed for seismic tests to operate safely. (Hello, global warming?)
It’s seeming less and less likely that any reasonable company will look to destroy this pristine landscape. After all, where will they secure funding for it? The Alaska Republicans are complaining that banks are staying away from the Arctic due to “reputational risk,” but it’s about a lot more than that. It’s about banks bottom line. Drilling in the remote Arctic is costly. For many banks, oil and gas projects in this region are just not viable investments anymore, especially when they weigh the environmental risk should something go wrong. These banks are making a sound business decision in staying clear of this region.
The coronavirus is only accelerating the trend of oil being a bad investment, particularly oil that’s costly to dig up and ship. The market is essentially turning rapidly against risky oil. It’s funny how Republicans love to tout the value of the free market until it doesn’t line up with their interests.
“This is nothing more than an ongoing temper tantrum from Republicans upset that banks are recognising the reality that Arctic drilling is an expensive risk that’s not worth taking,” Sierra Club senior campaign representative Ben Cushing wrote in a statement to Gizmodo. “A growing number of banks are making the obvious business decision to stay away from drilling in the Arctic Refuge because it would threaten their reputation and their bottom line, and no amount of angry letters is going to change that.”
Alaska Republicans, however, are in denial. They want to see the world burn I guess. The pandemic offers a rare opportunity for world leaders to completely transform the economy to be less carbon-intensive. This is urgent given the way the climate crisis is already affecting our planet, particularly the rapidly changing Arctic. Though many Alaska Native communities do benefit financially from oil and gas exploration on their lands, they’re also the ones that are set to suffer the most from melting sea ice, thawing permafrost, and other impacts that affect their land and way of life.
However, their representatives in Congress don’t mention any of that in this letter. Instead of thinking about the long-term consequences of carbon pollution and damage wrought by drilling, they’re focused on the immediate benefits these communities may reap from the fossil fuel sector. If we’re talking about immediate concerns, though, what about a potential oil spill? How would that impact the marine resources many of these communities depend on?
The Congress members call this move from banks “discriminatory” in the letter, similar to what Trump administration officials have said. But what’s actually discriminatory is their inaction on a global crisis that will disproportionately harm their constituents.