Who’s Banking Enbridge?

The fight over the fate of Enbridge’s proposed Line 3 tar sands pipeline is growing.

posted by Alison Kirsch

Blockades, water protector camps, and protests at public hearings have spotlighted what is at stake: the Line 3 pipeline runs roughshod over Indigenous rights and threatens our shared climate by expanding access to dirty tar sands oil. Despite fierce opposition, construction is nearly complete in Canada and Wisconsin, meaning whether or not the pipeline proceeds in Minnesota will determine the destiny of the project.

While Enbridge continues to push the project forward, other actors are supporting the pipeline behind the scenes: big banks.

Enbridge has billions of dollars in loans provided by dozens of big banks that it can use for its “general corporate purposes.” These credit facilities, as they’re called, are like giant credit cards for Enbridge to use as it pleases. And as new research shows, the credit facilities both provide Enbridge with crucial liquidity, or access to cash, including  for the funds which regulators require pipeline companies to have on hand in the event of an oil spill.

Enbridge has not sought project-specific financing for the Line 3 pipeline; its banks are facilitating other ways to access the money needed to build the project. It’s raised funds by selling off unwanted parts of its business — including some of its renewable energy assets. Enbridge is also selling shares and bonds, which big banks buy from the company and then resell to investors.

From underwriting, to advising, to lending, the Line 3 tar sands pipeline would not happen without the support of Enbridge’s banks. “Without the direct financing and services provided by its bankers, Enbridge would have little choice but to abandon its plans to expand the Line 3 pipeline,” concludes the Sightline Institute research.

So who are these banks?

All of the banks listed on this graphic are lenders to one or more credit facilities to relevant Enbridge subsidiary companies. The seven starred banks — Bank of America, JPMorgan Chase, Wells Fargo, Bank of Montreal, Scotiabank, TD, and MUFG — are lead agents on those credit facilities.

In particular, JPMorgan Chase, Wells Fargo, and Crédit Agricole are leading banks on lines of credit totalling $2 billion that are set to expire before the end of this year, giving the banks a critical opportunity to step away from Enbridge and Line 3. (Tell these banks: stop banking on tar sands!)

In addition, some banks on this list are raking in fees for advising Enbridge on how to sell off certain assets in order to focus more on pipelines like Line 3. Citi, CIBC, and RBC have all helped Enbridge sell off natural gas and renewables assets since May.

Also, some of these banks have supported Enbridge and Line 3 by underwriting the company’s bond issuances. Income from certain bond sales is a critical source of funding for Enbridge’s spending plan, which includes its massive Line 3 project.

Bank of America, Citi, Wells Fargo, Bank of Montreal, CIBC, Desjardins, National Bank of Canada, RBC, Scotiabank, TD, Barclays, Credit Suisse, Deutsche Bank, HSBC, and MUFG have all been managers in underwriting Enbridge’s bonds since July 2017.

Banks’ support of Enbridge continues a legacy of climate damages and abuses of Indigenous rights. They have a choice: they can walk away from Enbridge, from Line 3, and from expansion of the tar sands. Wall Street lenders and international banks can refuse to profit from climate disaster, and join a collective global effort to build a thriving future.

Where not hyperlinked, financial information is from Bloomberg Finance L.P.