Update: On January 6, 2021, the administration officially opened leasing in the Arctic National Wildlife Refuge. Thanks in part to major public pressure, only three bidders took part—a major setback for the administration’s campaign to drill within the refuge.
The The Trump administration has lashed out at banks that refuse to finance drilling projects in the Arctic, proposing a rule that purports to force them to loan to oil companies working in the far north, regardless of the bank’s values, strategies, or shareholder preferences.
The six largest U.S. banks—Bank of America, Citigroup, Goldman Sachs, JP Morgan Chase, Morgan Stanley, and Wells Fargo—have all announced policies against funding Arctic oil exploration, which poses great threats to Indigenous communities, wildlife, and the global climate. The movement has frustrated President Trump, who is aggressively promoting oil development in sensitive Arctic ecosystems, including the Arctic National Wildlife Refuge. The Arctic is a place of immense cultural and ecological importance, a place that would be difficult for emergency efforts to access should something go wrong, and the last place on earth we should be drilling for oil.
The Trump administration’s new rule, issued by the Office of the Comptroller of Currency, attempts to reverse the banks’ policies by fiat: “Organizations involved in politically controversial but lawful businesses—whether family planning organizations, energy companies, or otherwise—are entitled to fair access to financial services under the law,” the rule states. Proponents attempt to justify this policy, in part, by comparing the banks’ decisions to the odious practice of “redlining”—discriminatory practices by lending institutions against low-income and communities of color that fuel segregation and inhibit upward financial mobility. To say such comparisons are inapt and offensive is an understatement of epic proportions.
It’s not yet clear if the rule will have any practical effect. While the rule forbids banks to categorically exclude Arctic drilling from the activities they will finance, the administration acknowledges that banks are free to make prudent investment decisions. The banks have already made clear their (sensible) view that Arctic drilling is simply bad business.
Goldman Sachs, the first of the big banks to rule out funding Arctic drilling, was unequivocal on this point. Michele Della Vigna, the firm’s head of energy industry research, said in 2017, “We think there is almost no rationale for Arctic exploration…Immensely complex, expensive projects like the Arctic we think can move too high on the cost curve to be economically doable.”