PROTECTING THE ARCTIC FROM
OIL AND GAS EXPANSION

SEPTEMBER 2021

Reclaim Finance research shows that despite the IPCC’s code red climate warning,

the oil and gas industry is still
expanding into the Arctic region, with the support
of major banks, investors and insurers.

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THE ARCTIC IS A CLIMATE BOMB
READY TO GO OFF

The Arctic holds enough discovered oil and gas reserves to burn 22% of our remaining carbon budget by 2050, if we are to achieve the universally-agreed goal of keeping global warming below 1.5°C. Ironically, as the Arctic melts faster and faster, its fossil fuels reserves are becoming more accessible. And the more oil and gas industry projects in the Arctic, the greater the pollution of the white ice sheets, undermining the vital role they play in cooling down the planet.

In turn, that means accelerating global warming in the Arctic, thawing permafrost and releasing methane, a gas 84 times more powerful than C02 in the short term. It’s a vicious climate circle.

ENOUGH OIL AND GAS IN THE ARCTIC TO BURN
A HOLE IN
OUR CARBON BUDGET

22% of our carbon budget to stay below 1.5 °C


OIL AND GAS COMPANIES
ARE LOOKING TO EXPAND
INTO THE ARCTIC

Despite the importance of the Arctic regions for climate stability, ecosystems and communities, there are 599 oil and gas fields listed in the Arctic region as defined by the Arctic Monitoring and Assessment Programme (AMAP). More than 220 of these sites are already in production. Despite heightened costs and extreme conditions, the Arctic frenzy could intensify: There are currently 39 oil and gas fields planned for production and 338 other discovered sites could also start developing. If all these future sites found the financial support they require, total reserves under production could double and burn up to 22% of our remaining 1.5°C carbon budget.

THE ARCTIC FRENZY COULD INTENSIFY

the arctic frenzy could intensify

Shockingly, Arctic oil and gas production is already ramping up: in the next five years, Arctic oil & gas production is set to increase by 20%. There are more than 20 companies developing new oil and gas projects in the Arctic region. We call them the “Arctic expansionists”. The number 1 long and short-term expansionist in the Arctic is Gazprom, the biggest Russian energy company and  second largest oil and gas producer in the world in 2020. Gazprom has big plans for the Arctic as 74% of its oil and gas reserves are based there. Russian companies may be leading the oil and gas frenzy in the Arctic but American ConocoPhillips is listed as the 3rd biggest expansionist with production levels due to increase by 36% by 2030. Nearly half of the companies are European, with French outfit TotalEnergies leading the way: by 2030, TotalEnergies’s oil and gas production in the Arctic is set to increase by 28%. 

THE ARCTIC EXPANSIONISTS

the arctic expansionists


BIG MONEY IS FUELLING
THE ARCTIC CRISIS

None of this fossil fuel bonanza could take place without backing from private finance. Bankers, investors and insurers have been directly or indirectly fuelling oil and gas expansion in the Arctic. 

We undertook extensive research to investigate how banks and investors were supporting the Arctic expansionists. The findings: from 2016 to 2020, commercial banks channeled $314 billion to Arctic expansionists in loans and underwriting. As of March 2021, investors held roughly $272 billion in those same companies in shares and bonds. 

BILLIONS OF DOLLARS CHANNELED TO OIL AND GAS COMPANIES EXPANDING
IN THE ARCTIC

billions of dollars channeled to oil and gas companies expanding in the arctic

80% of all loans and underwriting to Arctic expansionists comes from just 30 banks. The list includes banks committed to restricting oil & gas financing in the Arctic: JPMorgan Chase (top globally with $18.6bn between 2016-2020), Barclays (4th largest, $13.2bn), Citigroup (6th, $12.2bn) and BNP Paribas (7th, $11.8bn). In 2020 alone, despite adopting Arctic exclusion policies, BNP Paribas and HSBC were the top financiers of the companies developing new oil and gas in the Arctic. 

There are hundreds of investors backing oil and gas companies developing new projects in the Arctic. 30 financial companies are responsible for $162.6 billion of the investments, led by BlackRock (top globally with $28.5 bn), Vanguard (2nd, $21.6 bn), and Crédit Agricole via Amundi (3rd, $12.9 bn). Only two of the top 30 investors currently have a policy restricting investments in the Arctic. Top investor, Blackrock, does not have an Arctic policy. 

THE TOP 30 BANKS AND INVESTORS SUPPORTING ARCTIC EXPANSIONISTS

the top 30 banks and investors supporting arctic drilling


BANKS, INVESTORS AND INSURERS
ARE FAILING TO PROTECT THE ARCTIC

Although an increasing number of banks, investors and insurers have some sort of restriction for oil and gas operations in the Arctic, support for oil and gas development in the Arctic has continued largely unabated. Policies are failing to stop oil and gas expansion in the Arctic for three reasons.

1. Firstly, none of the policies exclude corporate support to companies developing new oil and gas projects in the Arctic.

2. Secondly, none of the policies fully cover the Arctic region: not one major financial player listed in our report has chosen to protect the most comprehensive and climate-relevant Arctic boundaries as defined by the Arctic Monitoring and Assessment Programme.

3. Thirdly, too many policies don’t rule out support for gas projects in the Arctic, despite its potent role in global warming and recents calls by the IPCC and the IEA to reduce gas production.

Click here to explore our interactive map, navigate through the different Arctic exclusion scopes, and find out whether financiers are effectively tackling oil and gas expansion in the Arctic.

NAVIGATE THROUGH OUR INTERACTIVE MAP TO FIND OUT WHY FINANCIERS ARE NOT EFFECTIVELY PROTECTING THE ARCTIC

 

a(rtic)map
Click here to access our interactive map of the Arctic region


EFFECTIVELY PROTECTING
THE ARCTIC

01.

Protect the AMAP Arctic region from oil and gas expansion.

In order to effectively protect the Arctic, financial players must base their policies on the most comprehensive and environmentally-relevant boundaries of the Arctic. Only one of the competing Arctic definitions ticks all the boxes: the perimeter defined by the Arctic Council’s Assessment and Monitoring Programme (AMAP) to monitor climate change and pollution in the Arctic.

02.

Commit to not support any new onshore and offshore, oil and gas, upstream and midstream projects in the Arctic region.

The Arctic policies should be as comprehensive as possible. Financial players should pledge to exclude any kind of direct support, including financing, insurance, investment and advisory services, to both oil and gas projects and infrastructure development in the Arctic, be it onshore or offshore, upstream or midstream.

03.

Blacklist all oil and gas companies expanding in the Arctic region

Expansion is no longer an option. A robust Arctic policy should explicitly stop supporting any company that does not commit to stop developing new oil and gas projects in the Arctic by the end of 2022. Even when the Arctic operations represent a minor share of the company’s business model, they represent a major threat for the Arctic and ecosystems.


DIVING DEEPER INTO
THE ARCTIC

Explore our interactive map of the Arctic
Read the full report
Read our press release