Funding for Arctic oil is drying up
It’s Monday, March 9, and another major bank is pulling out of offshore drilling in the Arctic.
UBS, a Swiss multinational investment bank, announced Thursday that it will no longer finance new offshore oil projects in the Arctic, new oil sands projects, or new thermal coal mines. As part of its new climate strategy, the bank will also consider additional factors — like a company’s past environment record and how well it manages methane leaks and oil spills — before investing in liquified natural gas plants and ultra-deepwater drilling projects.
Earlier this year, divestment advocates Bill McKibben and Lennox Yearwood Jr. wrote, “If we could get just one offending bank to move toward divesting from fossil fuels, the ripple effects would be both swift and global.” That prediction is starting to play out: UBS’s announcement follows a slew of similar moves from Goldman Sachs, BlackRock, JPMorgan, and the Royal Bank of Scotland. UBS was the fifth-largest European lender for oil and gas projects in the Arctic, providing more than $300 million between 2016 and 2018.
One expert told the Associated Press that major oil companies that drill in Alaska do not rely on banks to finance their projects, so divestment from Arctic drilling will mostly affect smaller operators. But the Trump administration’s desired expansion of offshore oil development in Alaska’s Arctic waters is currently on hold anyway, after being challenged by conservation groups in a federal court.
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