This blog was originally published as a case study in “Banking on Climate Chaos: Fossil Fuel Finance Report 2021” — a report by Rainforest Action Network, BankTrack, Indigenous Environmental Network, Oil Change International, Reclaim Finance, and Sierra Club. You can see the full report here.
The Arctic National Wildlife Refuge is one of the world’s last intact ecosystems and one of the few places in the United States that has never been developed or industrialized. The coastal plain of the refuge is home to nearly 200 wildlife species, including the Porcupine caribou herd that gathers and gives birth there. The Gwich’in people have thrived in villages along the migration path of the Porcupine caribou herd for millennia and consider the coastal plain to be sacred. In fact, the Gwich’in call the coastal plain “Iizhak Gwats’an Gwandaii Goodlit,” meaning “the Sacred Place Where Life Begins.”
Despite long-term political efforts to open the area to drilling, polls show an overwhelming majority of Americans oppose drilling in the Arctic Refuge. After 50 years of protection, the refuge was opened to oil and gas leasing and development by a provision tacked onto a 2017 tax bill. Following that, the rushed process that the Trump administration used to accelerate leasing was improperly conducted and ignored the voices of the Gwich’in and the overwhelming will of the public.
In recent years, a growing number of major banks around the world have begun to exclude financing for oil and gas development in the Arctic Refuge and the broader Arctic region. The six largest U.S. banks have prohibited funding for Arctic drilling projects, including in the Arctic Refuge, while the five largest Canadian banks have ruled out funding Arctic Refuge drilling projects in particular. In total, around 30 global banks have exclusion policies on Arctic drilling.
This public repudiation of direct financing for Arctic drilling projects may have contributed to the low commercial interest in the lease sale held at the end of Trump’s presidency. Ultimately, fewer than half the leases offered were sold, and those that were sold generated less than 1% of the revenue that the tax bill had projected. And yet, to fully end support for Arctic oil and gas activities, banks need to end not just direct financing for projects in the region but also financing for companies active there. Without these guardrails, banks like JPMorgan Chase, ICBC, China Minsheng Bank, and Sberbank were the biggest bankers of Arctic oil and gas in the five years since the adoption of the Paris Agreement.