April, 10 2020, 12:00am EDT
Stop the Money Pipeline: Private Banks Owning Oil Companies Is a Recipe for Disaster
The news that major U.S. banks like JPMorgan Chase are preparing to ask regulators to allow them to take direct ownership of oil and gas companies should ring major alarm bells on Capitol Hill and across the nation, according to organizations with the Stop the Money Pipeline coalition.
WASHINGTON
The news that major U.S. banks like JPMorgan Chase are preparing to ask regulators to allow them to take direct ownership of oil and gas companies should ring major alarm bells on Capitol Hill and across the nation, according to organizations with the Stop the Money Pipeline coalition.
On Thursday evening, Reuters reported that JPMorgan Chase & Co, Wells Fargo & Co, Bank of America Corp, and Citigroup Inc are each preparing to set up independent companies that could directly own oil and gas assets.
"So Chase and Wells Fargo want to cut out the middleman and go into the oil business, directly destroying the climate? Greed does weird things to your mind and your heart," said Bill McKibben, co-founder of 350.org.
These plans are in direct contradiction to the banks' stated goals of addressing the climate emergency. The only possible justification for taking an ownership stake in an oil and gas company would be to immediately begin winding down production and retiring existing assets, while taking care of workers by providing full benefits and pension guarantees. According to the Reuters reporting, however, banks seem to be planning to do just the opposite, attempting to move the companies back into profitability, likely by taking advantage of federal bailout money that should go to working families.
"Allowing private banks to start an unholy marriage with bankrupt fossil fuel companies would be a catastrophic mistake for communities and climate," said Collin Rees, Senior Campaigner at Oil Change International. "Any words JPMorgan Chase, Wells Fargo, Bank of America, and Citi have ever said about climate action would be instantly meaningless. The fossil fuel industry needs a just transition for workers and a swift phase-out of production, not a transfer of the keys to predatory financial institutions focused on profits for billionaires."
"This is like a bookie purchasing the track, only the track is a dying industry killing our chance at a future. Clearly these banks' climate commitments aren't worth the 'recycled' paper they were written on," said Tara Houska (Couchiching First Nation), founder of Giniw Collective. "It's our money in their vaults -- hitting 'withdrawal' is long overdue."
There is little reason to believe that the four banks mentioned in the article have any intention of mitigating the climate impact of their actions. JPMorgan Chase, Wells Fargo, Citi, and Bank of America are, in that order, the four largest global bankers of fossil fuels, as detailed in the recently released Banking on Climate Change: Fossil Fuel Finance Report 2020.
"JPMorgan Chase, Wells Fargo, Bank of America and Citi are the top four fracking banks in the world, and the top four fossil fuel banks in the world. This development exposes the central role of banks in fossil fuels and clearly illustrates the riskiness of fossil finance," said Jason Opena Disterhoft, Senior Campaigner with Rainforest Action Network. "As the COVID recovery goes forward, a common-sense guardrail should be: banks can't take public money without committing to zero out their fossil financing. No bailout without fossil phaseout."
Along with the terrible climate and public health impacts of funding these oil and gas companies to continue to pollute, allowing financial institutions to directly own fossil fuel assets is an open invitation to corruption. In 2013, JPMorgan Chase paid a $410 million fine for manipulating electricity markets in the Midwest. The same year, Goldman Sachs was caught fixing aluminum prices by hoarding it in warehouses owned by the bank. Allowing banks to own companies in an industry already known for its corruption, disregard for public safety, and flagrant violation of environmental laws is a recipe for disaster.
"No way no how should regulators bail out climate-destroying banks like JPMorgan Chase from bankrupt investments by letting them become oil and gas holding corporations," said Pete Sikora, Climate Campaigns Director, New York Communities for Change. "The government should take over bankrupt oil and gas assets in order to rapidly retire them while protecting dependent workers and communities, not bank profits."
Elected officials and regulators have raised the alarm before about financial institutions taking direct ownership of fossil fuel companies. This session in Congress, Reps. Jesus 'Chuy' Garcia (IL-04) and Rashida Tlaib (MI-13) have introduced the Protecting Consumers Against Market Manipulation Act to set stronger limits separating banking and commerce, including by limiting banks' ownership of commodities. Sens. Elizabeth Warren (D-MA) and Sherrod Brown (D-OH) have also warned of the risks of bank ownership of physical commodities, including fossil fuel assets.
"Particularly at this moment, banks should be using their balance sheets to support small businesses and workers, not trying to spin a profit by propping up a dying industry that's the leading cause of climate change. If the banks are going to own oil and gas companies, the only acceptable outcome is to wind down the companies, retire their polluting assets, and take care of their workers," said Moira Birss, Climate and Finance Director at Amazon Watch.
The Stop the Money Pipeline coalition is calling on Congress and federal regulators to take immediate action to ensure the response to the coronavirus pandemic doesn't worsen the ongoing climate emergency. First, they must prevent all banks from taking ownership stakes in fossil fuel companies and assets. Second, they must ensure that no bailout money goes to banks, asset managers, or insurers unless these institutions commit to phasing out their support for fossil fuels and deforestation. Third, they must pass meaningful regulations that safeguard the financial system and the climate, including by limiting financial institutions' ability to finance fossil fuels and deforestation.
"The Fed should be intervening to make sure that fossil fuel companies are wound down and their workers and environmental obligations taken care of, not passing them off to banks who will look to spin a quick profit at the expense of both people and planet," said Alec Connon with the Stop the Money Pipeline coalition.
Stop the Money Pipeline will be engaging hundreds of thousands of Americans to send this message directly to Congress and Wall Street on April 23 as part of Earth Day Live, three days of online action around the 50th Anniversary of Earth Day.
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Additional Quotes:
"Over the last decade, US oil and gas producers have racked up more than $200 billion in corporate debt in a failed effort to make fracking profitable and keep expanding production while fossil fuel prices and prospects decline. With demand and revenue projections now collapsing at the precise moment when the bill is coming due, the banks that financed this massive and failed gamble are poised to seize assets to cover their losses. Not content to merely bankroll climate destruction and human rights abuses on a global scale, major banks are now moving to own the climate crisis outright. This is, to put it mildly, a very bad investment," said Carroll Muffett, President of the Center for International Environmental Law.
"At a moment when local people and communities need urgent government relief from the global pandemic it is downright criminal that Wall Street wants to buy out failing fossil fuel companies. There should be no bailout for polluters, from either Wall Street or Trump. We demand that government resources go directly to support communities directly." said Liz Butler, Vice President of Organizing and Strategic Alliances at Friends of the Earth.
"This is the exact opposite of what the financial industry needs to be doing at this moment," said Caroline Henderson, Senior Climate Campaigner with Greenpeace USA. "In the midst of the COVID-19 pandemic, banks should be supporting small businesses and workers, as well as investing in climate resiliency -- not becoming oil and gas corporations. We know we need to shift 90 percent of Wall Street's fossil fuel investments to low-carbon energy and renewables if we're going to keep the Earth's warming under 1.5 C. That means banks must stop financing destructive industries, and should certainly not be purchasing them in order to try and make them profitable again."
"After decades of financing climate destruction, JP Morgan Chase, Wells Fargo, Bank of America, and Citigroup got what they paid for: defaulting loans, declining assets, and a dangerously warming climate." said Tamara Toles O'Laughlin, 350.org's North America Director. "Now, in a desperate attempt to recoup what costs they can, these banks are taking ownership over oil and gas companies -- clarifying what many in the climate movement have known all along: our financial institutions are in bed with fossil fuels for short-term gains and long-term destruction. Sadly, it will be the workers, our communities, and those on the frontlines of dangerous fossil fuel projects who will bear the true cost of the damage."
"As Colorado's residents brace for the peak of coronavirus we are faced with increased vulnerability due to pollution from the massive amount of fracking and oil and gas operations such as frontline communities around the Suncor tar sands refinery and fracking operations in neighborhoods throughout the front range, bailing out these companies is a human rights violation of incredible proportions. We demand our government protect our most vulnerable and put a halt to these bail outs immediately," said Amy Gray Volunteer Coordinator with 350 Colorado.
Oil Change International is a research, communications, and advocacy organization focused on exposing the true costs of fossil fuels and facilitating the ongoing transition to clean energy.
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Groups Warn Gang Crackdown in El Salvador Has Led to Human Rights Crisis
"Reducing gang violence by replacing it with state violence cannot be a success," said one Amnesty International official.
Mar 27, 2024
Two years after Salvadoran President Nayib Bukele declared a "state of exception" that was originally adopted for a 30-day period in response for a spate of apparent gang killings, the government is boasting that its policies have driven down the homicide rate by 70%—but international rights defenders on Wednesday warned the crackdown has plunged the country into a human rights crisis.
Amnesty International said that according to local victims' movements and human rights groups, El Salvador's former murder rate has been replaced by 327 cases of forced disappearances since March 2022, as well as 78,000 arbitrary detentions as police have raided neighborhoods, particularly in low-income areas.
"A total of approximately 102,000 people [are] now deprived of their freedom in the country—a situation of prison overcrowding of approximately 148% percent and at least 235 deaths in state custody," said Amnesty.
Bukele adopted the state of emergency after El Salvador reported its deadliest peak in apparent gang violence in recent history, with gangs blamed for 92 people's deaths over three days in March 2022.
Under the emergency order, authorities have suspended the right to privacy in communications, to be informed of the reason for one's arrest, and to be taken before a judge within 72 hours of an arrest. A report by Human Rights Watch in December 2022 also warned of "torture, or other cruel, inhumane, or degrading treatment against people accused of crimes." Officers told people during arrests only that they were following "orders from the president," and in some cases, told people they were being taken to a police station for "questioning" when they were actually under arrest.
"The insistence of Nayib Bukele's government on maintaining the state of emergency, the adoption of disproportionate measures, and the denial, minimization, and concealment of reported serious human rights violations reflect the government's unwillingness to fulfill its duty to respect and promote human rights in the country," Ana Piquer, Amnesty International's Americas director, said Wednesday. "It also demonstrates its inability to design comprehensive long-term measures to address the root causes of violence and criminality without forcing the population to choose between security and freedom."
Amnesty's statement came a day after Justice and Security Minister Gustavo Villatoro said Bukele's government plans to continue its strategy to "eradicate this endemic evil."
"This war against these terrorists will continue," said Villatoro in a televised address.
Despite outcry from domestic and international human rights groups, Bukele won his reelection campaign in a landslide last month. El Faro reported that Bukele's government had violated some election rules including airing ads within three days of the election and campaigning on Election Day. Some poll workers also wore clothes identifying them as supporters of Bukele's Nueva Ideas party, and police allegedly blocked journalists from working near polling locations, prompting accusations of intimidation and harassment by the Association of Journalists of El Salvador.
The Due Process of Law Foundation released a report Tuesday warning that Bukele's government could be guilty of crimes against humanity as it continues its crackdown.
"Well over 76,000 people, including minors, have been detained under the state of exception, accused of having ties to gangs," wrote the group. "Many or most of these detentions appear to be occurring without any reasonable grounds for suspecting that the person may have committed a crime. Mere physical appearance—including having tattoos—seems to be enough to put people at risk of arrest, with young men from poor districts a particular target. Arrests of this nature are in themselves discriminatory, and may well qualify as arbitrary. According to the United Nations Working Group on Arbitrary Detention, under customary
international law, 'The legal basis justifying... detention must be accessible, understandable, nonretroactive, and applied in a consistent and predictable way.'"
Amnesty noted on Wednesday that human rights defenders and dissidents also face "increased risk" under the state of emergency, "as they are criminalized." As Common Dreams reported this week, five water defenders are scheduled to stand trial on April 3 for allegedly killing a military informant, an accusation for which the government has produced no proof.
"In the absence of any kind of evaluation and checks and balances within the country, and with only a timid response from the international community, the false illusion has been created that President Bukele has found the magic formula to solve the very complex problems of violence and criminality in a seemingly simple way. But reducing gang violence by replacing it with state violence cannot be a success," said Piquer. "The authorities in El Salvador must focus the state response on comprehensive policies that respect human rights and seek long-term solutions."
"The international community," she added, "must respond in a robust, articulate and forceful manner, condemning any model of public security that is based on human rights violations."
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Revolving Door Spins as Ex-Fossil Fuel Regulator Joins Carbon Capture Firm
"This move is intended to make sure policymakers continue to make bad bets on carbon capture ever working," said one critic.
Mar 27, 2024
CarbonCapture Inc. on Wednesday announced the appointment of Neil Chatterjee to its board of directors—sparking fresh criticism of technology to capture and store carbon dioxide, the former U.S. regulator, and the revolving door between government and industry.
Chatterjee was appointed to the Federal Energy Regulatory Commission in 2017 by then-President Donald Trump, now the presumptive Republican presidential nominee. Chatterjee served as FERC's chair twice before his term expired in 2021. Prior to joining the commission, he advised U.S. Senate Minority Leader Mitch McConnell (R-Ky.) on energy.
"After greenlighting oil and gas expansion at FERC, Chatterjee is now capitalizing off of attempts to undo those harms," Hannah Story Brown, a senior researcher in climate and governance at the Revolving Door Project, told Common Dreams. "It would have been far less costly to the public interest and the public purse if Chatterjee had helped stanch the flow of carbon pollution into our atmosphere when he was in the position to."
"After greenlighting oil and gas expansion at FERC, Chatterjee is now capitalizing off of attempts to undo those harms."
Food & Water Watch policy director Jim Walsh said that "the so-called 'carbon capture' industry relies on billions of dollars in giveaways from the federal government, so it should not be a surprise that a company like this would add a Beltway insider to its board of directors."
CarbonCapture Inc.'s statement on Chatterjee celebrates his "deep ties in Washington and across the industry," saying that "in his time on Capitol Hill and at FERC, he established a reputation as a bipartisan operator who built alliances and cut through red tape."
The company's CEO, Adrian Corless, said that Chatterjee's "deep understanding of the energy landscape in the U.S. and abroad will be incredibly important as we source large amounts of clean energy in the face of grid expansion challenges and bottlenecks."
The firm builds "deeply modular" direct air capture (DAC) machines, which "use solid sorbents that soak up atmospheric CO2 when cooled and release concentrated CO2 when heated," as its website details. "The captured CO2 can then be permanently stored underground or used to make synthetic fuels, low-carbon concrete, carbon black, or other industrial products that require clean CO2."
Stressing the need to "decarbonize the atmosphere as quickly as possible," Chatterjee said Wednesday that "CarbonCapture's groundbreaking, modular direct air capture machines have put our country on the fast track to scale a proven solution at the speed and cost necessary to make a meaningful impact."
Food & Water Watch agrees that the warming world requires swift and sweeping action on planet-heating pollution. Along with advocating for a rapid and just global phaseout of fossil fuels, the group prioritizes "calling foul on fake solutions" to the climate emergency.
"The fossil fuel industries are eager to tout carbon waste sequestration and direct air capture because they bolster the dominance of dirty energy sources like oil and gas," Walsh told Common Dreams. "This is why they are called 'false solutions'—they delay the necessary actions to get off fossil fuels."
Citing an International Energy Agency analyst in an article about the "major hurdles" that remain as DAC ramps up, Yale Environment 360reported last week that "about three-quarters of all globally captured CO2 (which comes mainly from industrial flue stacks) is currently being used for enhanced oil recovery," which involves injecting CO2 into wells to bury it and extract more oil.
As a pair of Walsh's colleagues detailed for Food & Water Watch's website last year, other issues with DAC include the technology's high energy needs, toxic solvents, and risky storage options.
"Carbon capture has a long history of failure in the real world, but these companies have had great success in securing billions in government handouts."
"Carbon capture has a long history of failure in the real world, but these companies have had great success in securing billions in government handouts," Walsh said. In terms of Chatterjee's appointment, he added that "this move is intended to make sure policymakers continue to make bad bets on carbon capture ever working."
As Story Brown pointed out, "Neil Chatterjee's prototypical spin of the revolving door, moving from pro-industry regulator to regulated industry, comes with added irony."
"As a regulator, he positioned himself as preferring market-based 'solutions' over government mandates, subsidies, and regulations," she explained. "But all that skepticism apparently vanished when he joined the carbon capture business, whose only hope of profitability comes from government subsidies like those in the Inflation Reduction Act."
Corless was among those who welcomed what Timecalled a "bonanza for the carbon capture industry" in the 2022 legislation. Shortly before President Joe Biden signed the bill, the CEO said that "it's going to make it easy for us to raise the capital to build the project earlier and to build it faster."
However, it's not just the government that is bankrolling CarbonCapture Inc. and similar ventures, as Story Brown noted.
"Neil Chatterjee hasn't left the lure of market magic behind," she said. "His firm has pre-sold millions in carbon removal credits so that energy-guzzling firms from Amazon to Aramco can greenwash their operations."
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Democratic Insider Rips 'Shocking' US Claim That Israel Is Following International Law
"There is no time to spare in pulling back from this outrageous assertion by the State Department," said Center for American Progress president Patrick Gaspard.
Mar 27, 2024
A longtime Democratic operative and current president of the Center for American Progress issued a scathing statement Tuesday criticizing the Biden administration for accepting the Israeli government's claim that it is adhering to international law with its catastrophic military assault on the Gaza Strip.
"The State Department's shocking assertion that the Netanyahu government is complying with international law in Gaza is a gross disregard of overwhelming evidence and a dangerous precedent in the conduct of U.S. foreign policy," said Patrick Gaspard, who previously served as executive director of the Democratic National Committee (DNC) and U.S. ambassador to South Africa under the Obama administration.
"The stakes here are so high that the administration must be transparent and accountable in sharing with the American people all evidence that has led to this determination and the continued sale of offensive weapons to Israel," Gaspard argued, pointing to Israeli Defense Minister Yoav Gallant's stated goal of imposing a "complete siege" on Gaza at the start of the assault, which is now in its sixth month with no end in sight.
Gaspard said that "every aspect" of Gallant's "edict" has "been on open display to the world," with famine, dehydration, and disease spreading across the enclave as Israel persists in obstructing the delivery of humanitarian aid.
The CAP president's statement came after U.S. State Department spokesperson Matthew Miller told reporters earlier this week that the Biden administration has not found Israel "to be in violation of international humanitarian law, either when it comes to the conduct of the war or when it comes to the provision of humanitarian assistance."
Miller's remarks followed a letter from Gallant assuring the Biden administration that Israel is complying with international law in its use of American weaponry—a written assurance that was required under a new White House policy.
In a press briefing on Tuesday, Miller clarified that the administration's assessment of Israel's compliance with international law is "ongoing" and has "not reached a definitive conclusion."
But Miller reiterated that "we have not reached the conclusion with respect to Israel that they have violated international humanitarian law."
"There is no time to spare in pulling back from this outrageous assertion by the State Department."
Leading human rights organizations and United Nations experts have concluded that Israel is guilty of grave violations of international humanitarian law—including the crime of genocide—and called for an immediate arms embargo.
Gaspard said Tuesday that "by its own imposed standards," the U.S. "cannot heedlessly deliver offensive weapons as the Israeli government continues to bombard and starve innocents on a mass scale."
"These actions have nothing to do with self-defense; they are clearly intended as collective punishment and are resulting in the complete devastation of Palestinians as a people," Gaspard added. "There is no time to spare in pulling back from this outrageous assertion by the State Department: An Israeli incursion into Rafah promises to bring only more death and devastation to civilians—and will make the administration complicit in one of the worst tramplings of human rights in this century."
Gaspard's statement is just the latest evidence that dissent against the Biden administration's unwavering support for Israel is spreading in establishment circles. Last week, dozens of former U.S. officials signed a letter urging President Joe Biden to consider restricting military aid to Israel, citing its mass killing of Gaza civilians.
On Wednesday, a U.S. State Department official resigned in protest of Biden's Gaza policy, saying in an interview that "trying to advocate for human rights just became impossible."
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