U.S. Bank Quietly Joins $4B Deal With Dakota Access Owner After Declaring End to Oil and Gas Pipeline Loans
By Sharon Kelly
At a shareholder meeting this past spring, U.S. Bank announced it would be the first large American bank to completely stop issuing loans for oil and gas pipeline construction projects.
Environmental groups, indigenous activists and divestment advocates hailed U.S. Bank's announcement as a triumph.
Yet that triumph—and the bank's commitment—seems less sure with the news that U.S. Bank has entered into a new $4 billion loan deal with the company behind the contentious Dakota Access pipeline (DAPL).
For months, the bank had been under fire for financing the Dakota Access pipeline by providing over a quarter billion dollars worth of funding to its builder, Energy Transfer Partners (ETP). Environmentalists famously dropped a banner calling on U.S. Bank to divest from DAPL at the New Years 2017 Minnesota Vikings and Chicago Bears football game.
The language of the bank's new policy seemed blunt.
"The company does not provide project financing for the construction of oil or natural gas pipelines," U.S. Bancorp, parent company of U.S. Bank, wrote in its April 2017 Environmental Responsibility Policy.
Some advocates remained skeptical, however, pointing out that the line of credit extended to Energy Transfer Partners wouldn't be covered by that language, because it could be considered a loan for the company as a whole, not the more specific "project financing." And U.S. Bank's CEO told shareholders that his bank wouldn't end its existing Energy Transfer Partners deal, saying that instead it would "fulfill that contract and commitment."
"We know there are always loopholes through which banks will try to pass off responsibility," Rachel Heaton of Mazaska Talks and a Muckleshoot Tribe member told Yes Magazine, "but we will continue to resist until these banks completely divest from all pipeline and fossil fuel corporations and incorporate the Free, Prior, and Informed Consent of Indigenous peoples into their corporate lending structures."
Even if that specific contract wasn't going to be torn up, environmental groups hoped that in the future, the bank would limit its funding of fossil fuel projects.
CEO Andy Cecere "strongly implied that the bank would pull back from pipelines and ETP in particular—aside from its obligations under its 'contract with ETP' (i.e. its existing credit facility)," Brant Olson, Program Director at ClimateTruth.org, told DeSmog.
U.S. Bank's new environmental policy added that any new deals the bank did with companies in the oil and gas pipeline industry would have to undergo additional scrutiny, including a look at their environmental record.
"We want to confirm that a firm's policies and processes are sound and effective as they relate to the environment and the community in which it operates," the policy adds. "In accordance with our environmental responsibility commitment, we prohibit relationships with customers who participate in any illegal activities."
Transferring More Money to Energy Transfer Partners
That's why it was so striking when Energy Transfer Partners quietly announced in a Dec. 1 Securities and Exchange Commission (SEC) filing that U.S. Bank was part of ETP's new $4 billion credit deal.
ETP's projects include numerous controversial fossil fuel pipelines nationwide, including not only Dakota Access, but also Mariner East 2, Rover, Bayou Bridge, and the Energy Transfer Crude Oil pipeline.
Asked whether Energy Transfer Partners had passed muster during the additional due diligence in U.S. Bank's much-lauded environmental review policy, U.S. Bank's spokesperson Cheryl Leamon declined to comment. "As a matter of policy, we do not discuss customer relationships," she told DeSmog in an email.
Environmentalists hoped that this was a chance for U.S. Bank to end its dealings with ETP. StopETP.org, a coalition of national and local environmental and indigenous rights groups, wrote a letter to the bank in November, urging it to use the chance to cut ties with ETP, which was seeking to renew its $4 billion credit line in a deal involving numerous major banks.
But U.S. Bank has apparently refused, said Food and Water Watch senior researcher Dr. Hugh MacMillan, "after having scored praise back in May for its new pipeline finance policy."
U.S. Bank did not respond when asked about the types of law-breaking that might cross the line and cause a borrower to fail the bank's new due diligence requirements.
The bank's professed wariness of fossil fuel companies had drawn an angry response from the Energy Equipment and Infrastructure Alliance, which had fired off a letter to U.S. Bank protesting the new policy. "This creates the presumption that firms and people involved in these areas, including those providing construction, equipment, materials, services or other support to these operations, are more likely than all others to be 'bad actors'," the trade group wrote, "thus requiring a higher level of scrutiny."
That additional environmental record review was widely expected to be particularly bad news for Energy Transfer Partners, which has an environmental record that includes more than 300 pipeline incidents in the past decade, causing over $67 million dollars in property damage, according to data from the federal Pipeline and Hazardous Materials Safety Administration.
"From January 2010 through June 2017, ETP spilled hazardous liquids near water crossings more than twice as frequently as any other pipeline company in the United States this decade [and w]as responsible for almost 20 percent of all hazardous liquid spills near water crossings," a recently published report by the Waterkeeper Alliance noted.
In November, one of Energy Transfer Partners' pipeline projects was was sued by Ohio's Environmental Protection Agency over 13 violations of the state's environmental laws, including spewing millions of gallons of drilling fluid into the state's wetlands.
"Among other things, ETP has caused seven industrial spills during the construction of the $4.2 billion natural gas pipeline through Ohio, Pennsylvania, West Virginia and Michigan," Reps. Frank Pallone, Jr. and Maria Cantwell, ranking members of the House Committee on Energy and Commerce and Energy and Natural Resources, respectively, wrote in a July 27, 2017 letter to federal regulators decrying ETP's track record on complying with environmental laws.
The company's spill record has even drawn concern from investors, with The Street reporting, "'Energy Transfer seems to have an approach where they stick to the minimum requirements instead of exceeding them,' Genscape natural gas analyst Colette Breshears said."
Sunoco Logistics, which merged into ETP last year, had the worst oil spill record of any company in the industry, a 2016 Reuters investigative report found.
Reposted with permission from our media associate DeSmogBlog.
By Victoria Masterson
Using one of the world's problems to solve another is the philosophy behind a Norwegian start-up's mission to develop affordable housing from 100% recycled plastic.
Sustainable Homes<p>UN-Habitat says an <a href="https://unhabitat.org/un-habitat-aims-to-use-plastic-waste-to-support-housing-for-all" target="_blank">estimated 60% of people living in urban areas of Africa are in informal settlements</a>. At the same time, between 1990 and 2017, African countries imported around 230 metric tonnes of plastic, "which mostly ended up in dump sites creating a massive environmental challenge," the agency adds.</p><p>UN-Habitat deputy executive director, Victor Kisob, said the aim of the partnership with Othalo was to "promote adequate, sustainable and affordable housing for all."</p>
Artist's impression of an Othalo community, imagined by architect Julien De Smedt. Othalo<p>Othalo's process involves shredding plastic waste and mixing it with other elements, including non-flammable materials. Components are used to build up to four floors, with a home of 60 square metres using eight tons of recycled plastic. A factory with one production line can produce 2,800 housing units annually.</p><p>Following successful laboratory tests, Othalo's factory in Estonia has started producing components to build three demonstration homes for Kenya's capital, Nairobi; Yaoundé, the capital of Cameroon and Dakar, the capital of Senegal.</p><p>Othalo founder Frank Cato Lahti has been developing and testing the technology since 2016 in partnership with <a href="https://www.sintef.no/en/" target="_blank">SINTEF</a>, a 70-year-old independent research organization in Trondheim, Norway, and experts at Norway's <a href="https://en.uit.no/startsida" target="_blank" rel="noopener noreferrer">University of Tromsø</a>.</p>
Othalo founder Frank Cato Lahti. Othalo<p>Almost <a href="https://www.un.org/development/desa/publications/2018-revision-of-world-urbanization-prospects.html" target="_blank">seven out of every 10 people in the world are expected to live in urban areas by 2050</a>. More than 90% of this growth will take place in Africa, Asia, Latin America, and the Caribbean.</p><p>"In the absence of effective urban planning, the consequences of this rapid urbanization will be dramatic," UN-Habitat warns.</p><p>Lack of proper housing and growth of slums, inadequate and outdated infrastructure, escalating poverty and unemployment, and pollution and health issues, are just some of the effects.</p><p>Mindsets, policies, and approaches towards urbanization need to change for the growth of cities and urban areas to be turned into opportunities that will leave nobody behind, UN-Habitat says.</p>
Pioneers of Change<p>Reimagining cities and communities for greater resilience and sustainability was a key topic at the<a href="https://www.weforum.org/events/pioneers-of-change-summit-2020" target="_blank"> World Economic Forum's Pioneers of Change Summit 2020</a>.</p><p>The digital event brought together innovators and stakeholders from around the world to explore solutions to the challenges facing enterprises, governments and society.</p><p>Opening the summit, <a href="https://www.weforum.org/events/pioneers-of-change-summit-2020/sessions/opening-plenary-8f731cbc65" target="_blank">Stephan Mergenthaler, the Forum's Head of Strategic Intelligence and a member of the Executive Committee</a>, said: "We need to change the way we produce, the way we live and interact in our cities to make this transition to net-zero emissions a reality…</p><p>"And as this year has illustrated so dramatically, we need to make every effort that we keep populations healthy, if we want to avoid jeopardizing all this progress."</p><p><em>Reposted with permission from </em><em><a href="https://www.weforum.org/agenda/2020/11/un-africa-recycled-plastic-housing/" target="_blank">World Economic Forum</a>.</em><a href="https://www.ecowatch.com/r/entryeditor/2649069252#/" target="_self"></a></p>
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By Dolf Gielen and Morgan Bazilian
John Kerry helped bring the world into the Paris climate agreement and expanded America's reputation as a climate leader. That reputation is now in tatters, and President-elect Joe Biden is asking Kerry to rebuild it again – this time as U.S. climate envoy.
Energy Is at the Center of the Climate Challenge<p>The <a href="https://science2017.globalchange.gov/chapter/1/" target="_blank">effects of climate change</a> are already evident across the globe, from <a href="https://theconversation.com/100-degrees-in-siberia-5-ways-the-extreme-arctic-heat-wave-follows-a-disturbing-pattern-141442" target="_blank">extreme heat waves</a> to <a href="https://science2017.globalchange.gov/chapter/12/" target="_blank">sea level rise</a>. But while the challenge is daunting, there is hope. Solar and wind power have become the <a href="https://www.irena.org/publications/2020/Jun/Renewable-Power-Costs-in-2019" target="_blank">cheapest forms of power generation globally</a>, and technology progress and innovation continue apace to support a transition to clean energy.</p><p>In the U.S. under a Biden administration, long-term national climate legislation will depend on who controls the Senate, and that won't be clear until after two run-off elections in Georgia in January.</p><p>But there is no shortage of <a href="https://www.bloomberg.com/features/2020-biden-climate-change-advice/" target="_blank">ideas for ways Biden</a> could still take action even if his proposals are blocked in Congress. For example, he could use executive orders and direct government agencies to tighten regulations on greenhouse gas emissions; increase research and development in clean energy technologies; and empower states to exceed national standards, <a href="https://www.reuters.com/article/us-autos-emissions-california/defying-trump-california-locks-in-vehicle-emission-deals-with-major-automakers-idUSKCN25D2CH" target="_blank" rel="noopener noreferrer">as California did in the past with auto emission standards</a>. A focus on a just and equitable transition for communities and people affected by the decline of fossil fuels will also be key to creating a sustainable transition.</p><p>The U.S. position as the world's largest oil and gas producer and consumer creates political challenges for any administration. U.S. forays into European energy security are often treated with suspicion. Recently, France blocked <a href="https://www.wsj.com/articles/frances-engie-backs-out-of-u-s-lng-deal-11604435609" target="_blank">a multi-billion dollar contract</a> to buy U.S. liquefied natural gas because of concerns about limited emissions regulations in Texas.</p><p>Strengthening cooperation and partnerships with like-minded countries will be critical to bring about a transition to cleaner energy as well as sustainability in agriculture, forestry, water and other sectors of the global economy.</p>
Creating a Global Sustainable Transition<p>How the world recovers from COVID-19's economic damage could help drive a lasting shift in the global energy mix.</p><p>Nearly one-third of Europe's US$2 trillion economic relief package <a href="https://www.bloomberg.com/news/articles/2020-07-21/eu-approves-biggest-green-stimulus-in-history-with-572-billion-plan" target="_blank" rel="noopener noreferrer">involves investments that are also good for the climate</a>. The European Union is also strengthening its 2030 climate targets, though each country's energy and climate plans will be critical for successfully implementing them. The <a href="https://joebiden.com/clean-energy/" target="_blank" rel="noopener noreferrer">Biden plan</a> – including a $2 trillion commitment to developing sustainable energy and infrastructure – is aligned with a global energy transition, but its implementation is also uncertain.</p><p>Once Biden takes office, Kerry will be joining ongoing <a href="https://www.un.org/en/conferences/energy2021/about#:%7E:text=The%20overarching%20goal%20of%20the,2030%20Agenda%20for%20Sustainable%20Development.&text=Accelerate%20delivery%20of%20United%20Nations,related%20issues%20at%20all%20levels." target="_blank" rel="noopener noreferrer">high-level discussions on the energy transition</a> at the U.N. General Assembly and other gatherings of international leaders. With the U.S. no longer obstructing work on climate issues, the G-7 and G-20 have more potential for progress on energy and climate.</p><p>Lots of technical details still need to be worked out, including international trade frameworks and standards that can help countries lower greenhouse gas emissions enough to keep global warming in check. <a href="https://www.carbonpricingleadership.org/what" target="_blank" rel="noopener noreferrer">Carbon pricing</a> and <a href="https://www.csis.org/analysis/how-can-europe-get-carbon-border-adjustment-right" target="_blank" rel="noopener noreferrer">carbon border adjustment taxes</a>, which create incentive for companies to reduce emissions, may be part of it. A consistent and comprehensive set of national energy transition plans will also be needed.</p><p>The global shift to <a href="https://www.irena.org/publications/2019/Jan/A-New-World-The-Geopolitics-of-the-Energy-Transformation" target="_blank">clean energy will also have geopolitical implications for countries and regions</a>, and this will have a profound impact on wider international relations. Kerry, with his experience as secretary of state in the Obama administration, and Biden's plan to make the climate envoy position part of the National Security Council, may help mend these relations. In doing so, the U.S. may again join the wider community of countries willing to lead.</p>
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By Maria Caffrey
As we approach the holidays I, like most people, have been reflecting on everything 2020 has given us (or taken away) while starting to look ahead to 2021.