The Financial Powers Behind the Dakota Access Pipeline Must Be Confronted
A look into the banks and energy companies behind the Dakota Access Pipeline
The “Dakota Access” Pipeline (DAPL) is a $3.8 billion, 1,100 mile fracked-oil pipeline that is currently under construction running from the Bakken shale fields of North Dakota to Peoria, Illinois. DAPL is slated to cross Lakota Treaty Territory at the Standing Rock Sioux Reservation where it would be laid underneath the Missouri River, the longest river on the continent.
Construction of DAPL would impact many sites that are sacred to the Standing Rock Sioux and numerous other indigenous nations. DAPL would also, engender a renewed fracking-frenzy in the Bakken shale region, as well as endanger a source of fresh water for the Standing Rock Sioux and 8 million people living downstream.
This massive infrastructure project is being built and financed by a complex network of dozens of shady oil companies and banks with presences all over the world. Research into the pipeline’s ownership shows us that virtually every major bank in the world is financially connected to the companies involved in the project and numerous oil and gas companies will have ownership interests in the project. But who is driving the construction of the pipeline, and more importantly who has the power to stop the Dakota Access Pipeline?
The Ownership Interest
The Dakota Access Pipeline project is owned by a convoluted network of oil and pipeline companies, joint ventures, and holding companies. Dallas-based Energy Transfer Partners and its wholly-owned subsidiary Sunoco Logistics (ETP/SLX) currently own 38.25% of the pipeline; MarEn Bakken Company LLC, a joint venture between Enbridge Energy Partners and Marathon Petroleum Company owns 36.75% of the pipeline (ultimately Enbridge and Marathon hold 27.6% and 9.1% ownership interests in the pipeline); and a subsidiary of Phillips 66 owns the remaining 25% of the project.
"The oil companies behind the pipeline are rich, but they aren’t rich enough to shell out the $3.8 billion needed to build the pipeline on their own."
Energy Transfer Partners is overseeing the construction of the pipeline and if the Dakota Access Pipeline were to be completed completed Sunoco Logistics would take over as the operator of the pipeline.
As the company with, by far, the largest ownership interest and the company overseeing the construction and the theoretical operation of the pipeline Energy Transfer Partners is clearly responsible for driving this destructive project and the player in the best position to bring it to a halt.
Energy Transfer Partners is itself a complicated company. It’s actually three different companies—Energy Transfer Partners, Energy Transfer Equity, and Sunoco Logistics—that are controlled by a single general partnership company. While it is publicly traded it is relatively tightly held and controlled by a small group of key investors led by the flamboyant billionaire Kelcy Warren. In addition to his love of making money and destroying the earth Warren also owns a record label, Music Road Records, and he fancies himself as a major philanthropist. He’s a regular at the major gala dinners around his hometown of Dallas, TX and he even paid $10 million to name a park in downtown Dallas after his son Klyde.
The Money Behind the Pipeline
The oil companies behind the pipeline are rich, but they aren’t rich enough to shell out the $3.8 billion needed to build the pipeline on their own. While each of the companies involved holds lines of credit with numerous banks and financial institutions, the money that is ear-marked specifically for the project is a $2.5 billion project finance loan.
The loan, which closed on August 2, 2016 was coordinated by Citibank along with the Bank of Tokyo-Mitsubishi, Mizuho Bank and TD Securities. The interesting piece of this loan is that under the credit agreement the borrowers could only access $1.1 billion immediately. The other $1.4 billion would not become available until the pipeline received the appropriate permits.
As of the closing of the loan agreement $860.7 million of that original $1.1 billion had already been borrowed. If Citibank, the Bank of Tokyo-Mitsubishi, Mizuho Bank and TD Securities were to hold back remaining $1.4 billion the cash for the pipeline could dry up and the project could come grinding to a potentially permanent halt.
Protected by an Army for Hire
One additional company in this web of corporate greed deserves a dishonorable mention. G4S, a UK-based security multinational is providing armed mercenaries to harass and brutalize defenders of the water in North Dakota. This isn’t G4S’ first foray into human rights abuses. The company is the target of a years-long global campaign for its role in profiting from the inhumane treatment of Palestinians in Israeli prisons and the torture of children.
Water protectors in the Red Warrior Camp and the Camp of the Sacred Stone have been subjected to chemical weapons, arrest, dog attacks and other mistreatment at the hands of private security guards and law enforcement. While removing G4S from their posts in North Dakota would do little to slow the destruction, shining a spotlight on these hired goons could help to keep them in check and help to keep the water defenders safer.
Taking Action to Cut Off the Power Behind the Pipeline
As Utah Phillips once famously said, "the earth is not dying, it is being killed, and those who are killing it have names and addresses." With virtually every single major bank in the world and a gaggle of oil and gas companies standing to rake in huge profits off this destructive and irresponsible project there are simply too many names to name and addresses to list. But we do know where the power behind the pipeline is.
"The earth is not dying, it is being killed, and those who are killing it have names and addresses." —Utah PhillipsOf the four banks most involved in underwriting the project finance agreement—and the four banks that have the authority to yank the second half of the loan out from under this project—two have a major presence in North America: Citibank and TD Bank. Their customers need to know what these banks are up to and their executives need to know that we’ll disrupt business as usual until they stop the pipeline.
Energy Transfer Partners, the main driver behind the construction of the pipeline, is unlikely to recognize the error in its ways and stop this reckless project. But until funding is pulled, both ETP and its flamboyant CEO Kelcy Warren need to be isolated and marginalized. Warren shouldn’t be able to host concerts with his record label, Music Road Records, attend charity galas, or plaster his family’s name on buildings and public parks without being confronted for his central role in the construction of the Dakota Access Pipeline.
Hundreds of institutions and individuals are involved in financing, permitting, and building the Dakota Access Pipeline and they are each culpable in the destruction of sites that are sacred to the Standing Rock Sioux and numerous other indigenous nations. But Citibank, TD Bank and Kelcy Warren have the power to stop the pipeline and they are within our movements’ reach. Water protectors are taking bold and inspiring action in North Dakota and Iowa to put their bodies on the line to stop the pipeline; NGO’s and lawyers are battling the permits and approvals in courts and the halls of Congress. But we can continue to extend this fight across the continent and around the world by cutting off the power behind the pipeline.
Tapping into the New Currency: Direct Action
In early September, the Red Warrior Camp in partnership with the Camp of the Sacred Stones issued a call to action that stated: “Water is a necessity for all life. Water is life. Now is the time for all people from all walks of life to join together to stop the desecration and destruction of water, land and life!”
Around the globe, tapping into a "currency of moods" through these weeks of action, we saw disruptions at corporate events, vigils, protests, civil disobediences and constant digital and media communications. Rising Tide North America, the FANG collective and many other groups organized an effort that saw over one hundred actions and events in this two week period.
- In Dallas, TX, at the headquarters of Energy Transfer Partners in a bold night time action,“Anti-colonialists Against Billionaires” locked the building’s parking garage doors shut with U-locks and left a banner saying “Kelcey Warren is an Asshole. Solidarity with the Standing Rock Sioux Tribe. No DAPL”
- In Philadelphia, the city’s #NoDAPL Solidarity organizers put together a “tour of shame” that marched hundreds through the streets and shut down at least five TD Securities branches with non-violent direct action.
- In Vermont, over fifty people occupied a Michels construction site building another pipeline locally.
- In Pittsburgh, more than one hundred people shut down Liberty Avenue, a major thoroughfare, in front of the offices of the Army Corps of Engineers during a busy afternoon rush hour.
Solidarity with the fight against the Dakota Access Pipeline to a larger and larger scale was an important goal in September. People regularly put their bodies on the line in North Dakota to stop the pipeline, the call to action was for allies with privilege to do the same.
Lessons Moving Forward
Important ongoing lessons moving forward in the fight against the Dakota Access Pipeline and other fossil fuel infrastructure projects include:
- Fight in solidarity with Indigenous communities and other frontline communities. As stated above, the September actions were a call for allies to take action and escalate in support of Indigenous rights and stopping the Dakota Access Pipeline. The oil and coal barons of the world seek to exploit land and people. They regularly use race and class to divide and further their interests. Allies must take action and fight in solidarity with Indigenous and other frontline communities.
- Revoke the social and political license of carbon intensive industries to operate in the political economy. Oil companies own the U.S. political system and are major players in every part of the economy. Furthermore, the inevitability of the fossil fuel industry is a too accepted part our culture. That narrative must change. Aggressive campaigns targeting companies, CEOs, pro-industry pundits and thought-leaders is the key.
- Make militant direct action the organizing strategy, not just a tool in the toolbox. Big Green groups describe non-violent direct action as just one “tool in a toolbox.” Movements around the world use confrontational action as a strategy, not just as a tactic. Militant movements in Serbia ousted Milosevic, in Bolivia booted out Bechtel, and in Seattle shut down the World Trade Organization (WTO) and sent it into a tailspin. Militant direct action is a strategy we use to build real movements, change power dynamics, shift societies and even remove governments. Fighting oil companies, banks and pipelines, it creates a crisis in the business model.
- The Democratic Party is not our friend. Despite green groups like the Sierra Club and the Natural Resources Defense Center praising President Obama as a “climate hero” and framing their strategies in 2016 around preserving his "climate legacy," the industry-friendly policies on both the Dakota Access Pipeline and numerous other fossil fuel infrastructure projects remain decidedly unfriendly to the climate and communities impacted by them. Obama’s "All Of The Above" energy policy coupled with the FBI surveilling organizers, but refusing to investigate private security firms run amok are a long existing systemic pro-energy industry bias within his administration. The Democrats are not our friends. Whether it is the Obama administration or the upcoming Clinton administration.
- Fight capitalism and corporate power. A systemic critique of the existing economic system is required to delegitimize fossil fuels. This movement has its roots in anti-globalization, anti-austerity and Occupy movements. Portion of it have incorporated this critique into a vision for a better world. "Like corporate globalization, climate and related ecological crisis affects everyone, everywhere, so gives us an amazing opportunity to organize across the many things that keep us divided and ruled" reflects veteran street organizer David Solnit. "The challenge is to define the climate crisis deeply in a way that understands that it is rooted in an economic and political system that is hardwired to be anti-democratic and exploit the earth and people for profit."