Citing the Mountain Valley Pipeline's negative social and environmental impacts as well as its financial risks, a coalition of investors managing nearly a quarter-trillion dollars on Thursday sent a letter to some of the largest U.S. banks calling on them to end any and all funding for the fossil fuel project.
"The institutions dumping funds into this unnecessary fracked gas project are just pouring their money into a 300-mile long money pit," Ben Cushing, the Sierra Club's manager for financial advocacy, said in a statement released in response to the new campaign.
"Given the escalating financial, environmental, and social risks of this project, we strongly urge banks to re-evaluate any further financing."
—Lauren Compere, Boston Common Asset Management
"These investors want to make sure the big banks know it," he continued, referring to the letter (pdf) that investors who represent nearly $250 billion in assets sent to JPMorgan Chase, Wells Fargo, Scotiabank, TD Bank, Deutsche Bank, MUFG Banks, PNC, Citigroup, and Bank of America. "It's time... to stop supporting this billion-dollar boondoggle."
A November 2020 report (pdf) from Oil Change International identified most of those financial institutions, plus Union Bank and U.S. Bank, as the key sources of money behind the Mountain Valley Pipeline (MVP).
Cushing added that the fossil fuel project is "over three years behind schedule, has nearly doubled its original budget, and is bogged down in a self-inflicted permitting quagmire with no apparent resolution on the horizon."
In the letter urging big banks to cease financing the project—which would transport up to two billion cubic feet of fracked gas each day along a pipeline stretching 303 miles from northwestern West Virginia to southern Virginia—the investors wrote that they "are gravely concerned about the climate, financial, and reputational risks associated with MVP."
The letter continues:
MVP has already harmed communities and ecosystems alike; developers have received 350 notices of violating environmental protections. At the height of the Covid-19 pandemic, restarting construction poses an immediate threat to public health in many rural communities. And the pipeline will likely become a stranded asset in the near future as gas demand throughout the region rapidly erodes...
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As of November, 2020, MVP is already 3 years behind schedule and $3 billion over budget (double what it was originally projected to cost). MVP developers continue to mislead the public and investors alike; claiming the project is 92% complete. MVP's own documentation shows that as of October 23, 2020, only about half of the pipeline is complete to final restoration...
If completed, annual greenhouse gas emissions resulting from the entire MVP project... would be 128.7 million metric tons of CO2 equivalent annually—the same as would be emitted by over 37 coal-fired power plants or 27.3 million passenger vehicles. The public is increasingly opposed to any fracked gas projects; an August 2019 Associated Press poll shows nearly 80% of Americans oppose fracking.
Recently, an appellate court rejected the latest effort by pipeline opponents to halt construction, The Roanoke Times reported.
Nevertheless, the Sierra Club said that "the uncertainty surrounding the project reminds analysts and industry watchers of similar problems that led to the cancellation of the nearby Atlantic Coast Pipeline and many are openly wondering if the project will ever be completed at all."
Alluding to "the world's need to achieve net zero greenhouse gas emissions by 2050"—a timeline some climate experts say is not bold enough—Vincent Kaufmann, CEO at Ethos Foundation, said that "the risk of fossil fuel assets with long life cycles, such as the Mountain Valley Pipeline, becoming stranded assets looms large."
Lauren Compere, managing director of Boston Common Asset Management, agreed.
"Given the escalating financial, environmental, and social risks of this project," she said, "we strongly urge banks to re-evaluate any further financing to EQT and other developers and backers of this project."