Energy Secretary Takes a Swipe at Big Banks That Won’t Invest In Arctic Drilling

Photo: Jacquelyn Martin, Associated Press via The New York Times

The Secretary of Energy stunningly accused the major financial institutions that refuse to now invest in Arctic oil and gas exploration of discrimination against the oil and gas industry and likened the decision to the banks’ refusal in the past to make loans to minorities.  In an interview with Axios, here is exactly what he said:

“For years and years and years, banks would not lend money, insurance companies would not write policies in minority areas in the country. Redlining is the term used all throughout those debates. We didn’t want banks redlining certain parts of the country. We don’t want that here. I do not think banks should be redlining our oil and gas investment across the country.”

Why This Matters:  Arctic drilling has been fought due to its environmental toll since the 1960s,  The Administration can raise false flags (as if oil and gas companies at all resemble minorities subjected to systemic racism) and twist the facts, but in the end, drilling won’t happen without financial backers and the prospect that it would be profitable. It’s absurd to feel bad for either the unfairly maligned big banks or those “poor” oil and gas companies.  It’s an outrageous and deeply insensitive comparison.

Which Banks Won’t Drill?

In 1980, Congress decreed that no exploratory drilling or production could occur without further congressional action — and it stayed that way until President Trump demanded authority to lease the land for drilling, despite the ample domestic supply of oil and gas. So far, as we have reported, numerous banks now refuse to fund Arctic drilling projects after a vigorous public campaign by many climate change advocates.  Axios explained yesterday that since last December, “five of America’s six biggest banks — Goldman SachsWells FargoCitiMorgan Stanley and JPMorgan — have announced they won’t directly finance new oil and gas development in the Arctic. This includes specifically the Arctic National Wildlife Refuge.”  The problem for Alaska is that its current oil and gas drilling projects are drying up — they have been slowly declining for decades. Given the state of oil and gas prices right now and for the foreseeable future, investment in oil and gas exploration and development there is not of interest to the banks and the negative publicity around their current investments is not helping to create excitement around new drilling in the Arctic.

Reactions

Senator Bernie Sanders said:Racist redlining denied wealth to generations of Black Americans. Today, the fossil fuel industry dumps its pollution on communities of color. This comment from Trump’s Energy Secretary is disgusting.”

Bill McKibben of 350.org said: “The Secretary of Energy thinks that banks deciding not to invest in oil and gas because of climate change is the same as banks redlining minority communities for decades. This is some combination of gross and pathetic.”

Cleaning Up The Mess

After the comment, the Energy Department spokesperson put out this statement: “Secretary Brouillette has zero tolerance for discrimination of any type, and he was not in any way equating the plight of minority communities to that of energy companies,” Department of Energy spokesperson Shaylyn Hynes said of the redlining analogy. “Accusing him of doing so in order to manufacture a dramatic headline is both disingenuous and not based in any truth.”

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