Less than a hundred miles from where world leaders are discussing how to meet their climate pledges, BP is drilling for gas.
The Shafag-Asiman project, a vast gas field off the Azerbaijani coast, could inject more than 1 billion metric tons of carbon into the atmosphere, dealing a major blow to efforts to slow global warming.
BP said it intends to invest heavily in new oil and gas fields in the coming years. But it would not be able to continue these dirty projects without billions in support from big banks. Citigroup, JPMorgan Chase and Wells Fargo, along with a number of other banks, have all helped BP more than $5 billion last year.
Banks will be in focus at COP29 in Baku, Azerbaijan, as world leaders discuss how to raise hundreds of billions of dollars for countries suffering the effects of climate change.
Although conversations are unlikely to address their continued support for dirty energy, more than 140 banks worldwide have pledged to reduce emissions linked to their loans and investments to almost zero by 2050.
In May 2021, the International Energy Agency, the global body that coordinates countries’ energy policies, raised the alarm. Any new oil and gas developments will make it inevitable that temperatures will rise by more than 1.5 degrees Celsius. In other words, they would destroy the planet.
Meanwhile, at BP’s Shafag-Asiman field, engineers celebrated after finding fossil gas several thousand meters below the seabed. And the bankers prepared to raise billions more for BP.
That’s not all. Since May 2021, global banks committed to net zero have poured nearly $1 trillion into companies pursuing expansion of oil and gas projects that would push the world beyond its survivable limits. Combined, these projects would produce nearly seven times the annual emissions of the US, according to an analysis by The Bureau of Investigative Journalismor TBIJ.
“It’s indefensible,” says John Lang, founder of the Net Zero Tracker, which evaluates large companies’ net zero plans. “There is no way we can meet the temperature targets of the Paris Agreement if we continue to fund the exploration of oil and gas.”
He said banks with net-zero liabilities covering direct and indirect emissions cannot finance oil and gas expansion. “It’s greenwashing, plain and simple.”
It was at COP26 three years ago that a number of large banks first promise that by 2050 they would reduce almost all emissions from their loans and investments to zero and invest in financial products to offset the remaining emissions – which became known as “net zero.” Citigroup, for example, said it will do this in part by helping its customers transition away from fossil fuels and by stopping funding companies that don’t.
Many of the banks publicly trumpet their net-zero credentials. But Nigel Topping, a member of the UK’s Climate Change Committee, explained that even when banks commit to reducing emissions associated with their financing in line with net zero, this does not stop them from financing companies that continue to expand. [oil and gas production].”
Citi chief executive Jane Fraser said: “As the world’s most global bank, we can help drive the transition to a net-zero economy and deliver on the promise of the Paris Agreement.” The bank says it has already beaten its 2030 target, cutting CO2 emissions associated with energy customers by 38 percent between 2020 and 2022. But the funds it continues to raise for fossil fuel expanders threaten to cut oil and gas production – and their releases – to include. well past 2030.
Take his support for BP, what announced record profits in February last year and immediately announced that it would scale back its climate commitments and increase investments in oil and gas. It then enlisted the help of Citi and a host of other “net-zero” banks to raise $5.3 billion — and invested $4.8 billion in its oil and gas operations in the first half of this year.
BP too announced the first oil to come from a new platform in Azerbaijan’s sector of the Caspian, which is expected to operate until at least 2049, just a year before the world is supposed to reduce its dependence on fossil fuels.
BP and Citigroup did not respond to a request for comment. JPMorgan Chase and Wells Fargo declined to comment.
More than 180 companies expanding fossil fuel production have raised money from banks that have committed to net zero since May 2021, according to an analysis of data from the environmental campaign group Rainforest Action Network. Their expansion projects are spread all over the world, from ConocoPhillips in the Arctic Circle to Petrobras near the mouth of the Amazon River and Shell in the UK’s North Sea.
A TBIJ analysis of the Global Oil and Gas Exit List, compiled by the environmental campaign group Urgewald, shows these expansion projects could produce nearly 90 billion barrels of oil equivalent, which scientists say should stay in the ground. About half of that is oil and half is gas, according to Urgewald, and calculations suggest it could generate more than 34 billion metric tons of CO2 emissions when burned.
Topping said: “The fundamental problem is that the transition is not driven by regulation. … The only people who can make companies change are regulators, and the regulators are failing us.”
