As peak hurricane season looms, banks bolster cozy relationship with fossil fuel industry
Roishetta Sibley-Ozane in front of Westlake Chemical Plant in Cameron Parish.
Over the past several decades, the oil and gas industry promised to bring economic prosperity to the Gulf Coast. Instead, it brought financial instability and increasing climate disasters, and forced local communities to pay the price. As a result of the fossil fuel industry’s pollution, people living in the Gulf Coast face a growing number of climate-driven natural disasters like hurricanes and flooding.
As the peak of yet another hurricane season looms, it prompts us to once again ask the questions: Is the oil and gas industry set up to handle the increasing rate and severity of these events? And why do fossil fuel giants and their friends on Wall Street continue to pour money into fracked gas?
The fossil fuel industry’s role in climate change and its destructive presence in local communities is common knowledge for residents in the Gulf. But little is known about the other actors quietly bankrolling the fossil fuel industry, without ever being taken to task for their role—the banks that keep the cash flowing to the oil and gas companies making the most devastating impact in the Gulf. But the tide is turning, with activists and investors beginning to pressure big U.S. banks to address their role in the climate crisis.
The six largest U.S. banks – JPMorgan Chase, Citigroup, Wells Fargo, Bank of America, Morgan Stanley, and Goldman Sachs – are some of the biggest fossil fuel financiers in the world, pouring $44 billion into the top fracked gas (also called liquefied natural gas or LNG) import and export companies in the last 6 years alone.
The worst among them, Morgan Stanley, is the world’s largest banker of LNG companies. That includes here in Louisiana, where the bank helped finance the proposed Plaquemines LNG facility, which, if built, would become one of the largest fracked gas export terminals in the U.S.
A report released last month on the potential impacts of the Plaquemines LNG facility –written by the same expert who identified structural flaws in New Orleans’ levees following Hurricane Katrina – showed the proposed 26-foot storm wall surrounding the facility will over-top with water during major storm surges.
The facility’s proposed site sits barely 5 feet above sea level, in an area that flooded during Hurricane Ida and stayed flooded for weeks. Giant LNG projects like Plaquemines are clearly not prepared to handle the increasing rate and severity of climate-driven natural disasters. So why are banks putting billions into these risky investments?
There are seven fully operational LNG export facilities in the U.S. today, with nearly 20 new and expanded export facilities proposed to ship LNG from Texas and Louisiana to foreign markets. Fossil fuel giants have seized on recent global events to justify this massive buildout, insisting more LNG facilities are needed to ease global energy prices and reduce reliance on Russian gas.
The truth is these new facilities will do nothing to solve the short-term energy crisis, and will merely lock in decades of dangerous climate emissions, making it impossible for the U.S. to meet its climate goals.
Gulf Coast communities live with a daily deluge of toxic air pollution, frightening gas flares, and foul smells emanating from the numerous fossil fuel facilities in the region. These facilities release toxic pollutants known to cause respiratory and heart diseases, asthma, and even cancer.
Beyond these health impacts, the LNG export facilities proposed in the Gulf pose additional threats to already delicate wetland ecosystems, at a time when preserving these natural storm barriers is essential to prevent more severe flooding and protect against the increased frequency of hurricanes due to climate change.
The Plaquemines proposal, for example, will destroy nearby wetlands, with plans to restore wetlands elsewhere that will do nothing to protect the local community left facing storm surges head on.
Wall Street’s biggest banks love to brag about their climate commitments, hoping we will fall for their greenwashing. But behind the scenes, these institutions continue to fund the expansion of fossil fuel projects across the Gulf.
Put simply, banks like Morgan Stanley and Citigroup are financing the creation of sacrifice zones, placing misguided fantasies about short-term profits ahead of the real-life impacts on local communities and the planet.
The recent explosion at the Freeport LNG facility in Texas was a stark reminder the fracked gas industry is an inherently risky business, whose operations threaten the lives and livelihoods of people living nearby. As the climate crisis worsens, banks need to wake up to this reality, and help finance the transition to clean energy, not the buildout of more fracked gas.
The Gulf Coast is ground zero for climate change, and people living here already experience the devastating effects of climate change firsthand. Projects like Plaquemines are bad investments with no long-term economic benefits for local communities. In reality, they’re just stranded assets and future disasters waiting to happen.
Banks like Morgan Stanley and Citigroup, which are funding projects like these around the world, would be wise to reconsider their cozy relationship with the fossil fuel industry and their financing of these proposals. Or maybe this year’s hurricane season will be the warning they need.
Roishetta Ozane is the clean energy organizer at Health Gulf. Adele Shraiman is the Fossil-Free Finance campaigner with the Sierra Club.
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