Arctic oil, gas production is booming despite climate fears

Oil and gas companies are being bankrolled by some of the biggest names in finance to tap the Arctic’s vast natural wealth even as warnings grow about the melting ice cap due to man-made global warming.

Gazprom PJSC, ConocoPhillips and TotalEnergies SE are among energy firms expanding their fossil-fuel expansion in the region, with production of oil and gas set to climb 20% over the next five years, according to a report by Reclaim Finance. The banking sector is complicit, having provided more than $314 billion for such companies from 2016 to 2020, the climate watchdog said.

“The Arctic is a climate bomb, and our research shows that the oil and gas industry is hellbent on setting it off, thus blowing up our chances of avoiding runaway climate breakdown,” said Alix Mazounie, co-author of the report. “But they aren’t the only culprits: Financial institutions have bankrolled these companies, making a mockery of their own climate commitments.”

The study lays bare the increasing concern that financial institutions and energy companies often tout their green credentials, yet can be found acting in ways that are contrary. The authors say that while two-thirds of the top 30 banks fueling expansion in the Arctic have so-called Arctic restriction policies, none exclude support for companies involved in the development of new oil and gas projects in the region.

The world’s leaders will gather at the end of next month for crucial climate talks in Glasgow, Scotland, amid growing pressure to act following a warning from the Intergovernmental Panel on Climate Change that the target for keeping global warming below 1.5 degrees Celsius from pre-industrial levels would be breached unless more drastic action is taken. Earlier this year, the International Energy Agency said averting a climate crisis means there can be no new oil, gas or coal fields.

In a separate report published on Thursday, investors jointly managing $6.6 trillion are pressing the finance industry to boost funding for carbon-removal methods and standardize pollution credits. As much as 1.2 billion metric tons of the greenhouse gas must be removed annually by 2025 to meet the goals laid out by the Paris Agreement.

There are currently 599 oil and gas fields in the Arctic that are either in production, under development or have been discovered, according to the report. European banks are responsible for one quarter of the global underwriting and loans to the leading companies, it added.