Chase And Wells Fargo Continue to Bankroll Pipeline Companies
Chase matured their lines of credit to TransCanada this December, remaining the lead agent in the funding of the oil pipeline company. Together, with credit lines from Wells Fargo, it is providing loans amounting to $1.5 billion, according to Greenpeace.
JPMorgan Chase bank has renewed its loans to TransCanada, bankrolling the effort to build a pipeline that risks crude oil sands spills across indigenous land and agricultural water sources throughout the Midwestern United States.
The Canadian energy infrastructure company is awaiting conclusive approval of their proposed Keystone XL pipeline, which would travel 875 miles from Western Canada through Montana, South Dakota, and Nebraska, where it would connect with a previously existing pipeline path to the Gulf Coast.
After years of opposition by the Obama administration, President Trump gave approval to the construction of this pipeline in March 2017.
The product they transport, tar sands oil, is a crude oil mixture of hydrocarbons known as bitumen. It’s appearance when pulled from miles underground, is that of a black, sticky tar. Bitumen is used in the production of asphalt.
TransCanada’s primary tar sands source is the Athabasca mine, located in Northern Alberta near the town of Fort McMurray. When tar sands are extracted, they are a combination of bitumen, water, sand and clay. Extensive processing is necessary before the bitumen is transported to distant refineries, which further reduces the bitumen into oil.
Currently, the Keystone Pipeline carries the bitumen from Athabasca to the Gulf Coast for foreign and domestic export. It accounts for one fifth of Canadian crude oil exports.
On Nov. 16, 2017, the existing Keystone Pipeline suffered a leak of 5,000 barrels, releasing 210,000 gallons of oil into agricultural land in Marshall County, South Dakota. This was preceded by smaller oil spills in 2011 and 2016.
TransCanada’s proposed additional pipeline, the Keystone XL, would detour this network of oil transport directly beneath the Yellowstone River and in proximity to many other water sources used by indigenous tribes of the Midwestern United States. It would churn an estimated 830,000 barrels per day through 36-inch pipes. This would be a dramatic increase in the amount of oil transferred daily, increasing the existing risks of spills and leaks.
But the risk of an oil spill isn’t the only potential detrimental outcome of these pipelines. The process in its entirety, from mining to refining, is environmentally taxing on all fronts. The tar sands are among the world’s largest stocks of unburned carbon and; if extracted, processed, and burned in their entirety, the carbon dioxide pollution would equate to the emissions of 148 coal plants burning for 50 years.
Keystone XL and its respective financial supporters were the subject of public opposition that occurred in several major cities in the Western United States through the summer and fall of 2017. In Seattle, Greenpeace reported having disrupted over 100 bank branches.
But despite the campaign efforts, JPMorgan Chase matured their lines of credit to the oil pipeline company this December, remaining the lead agent in the funding of TransCanada. Together, with credit lines from Wells Fargo, it is providing loans amounting to $1.5 billion, according to Greenpeace.
JPMorgan Chase has not released a statement on the subject. Wells Fargo’s Senior Vice President Alan Elias wrote in a clarifying statement to the Fairfax Times that the company’s public position on the subject is that, until construction of the Keystone XL pipeline begins, the funds they provide to TransCanada do not link them in approval with the new pipeline.
“There are no project funding measures underway specific to the Keystone XL pipeline,” Elias wrote. “Therefore, Wells Fargo has not invested or loaned any money specific to that project.”
TransCanada’s initial designs of the Keystone XL were first submitted to the United States nearly a decade ago. It received its final regulatory approval from the Nebraska Public Service Commision in Nov. 2017, under the contingency of a redesigned path through Nebraska that detours east of the Sandhills region.
Pending this finalized route, TransCanada has not publicly announced the date on which their estimated $8 billion project will begin construction, but JPMorgan Chase and Wells Fargo’s will remain lead agents in the funding of the energy infrastructure company as a whole. And for many environmental groups, this is a disappointment.
“Greenpeace is deeply disappointed that JPMorgan Chase and other banks continue to fund companies trying to build dirty tar sands pipelines — projects that jeopardize human rights, drinking water, and our climate,” said Diana Best, Greenpeace USA Senior Climate and Energy Campaigner.
“These banks are on the wrong side of history.”