May 12, 2017 - “Who’s Banking on DAPL” Dakota Access Pipeline Finance Update
The Bakken Pipeline cost about $4.8 billion. That includes $3.8 billion for DAPL. There was a $2.5 billion project loan, and the rest was put on Energy Transfer credit cards, since paid off using money from selling a big ownership stake to Enbridge and Marathon. Phillips 66 is another big stakeholder, and major shipper on the pipeline.
The banks financing the pipeline have faced enormous political pressure, under the banners #DefundDAPL and #MazaskaTalks. Many of the DAPL banks are also financing the companies behind four tar sands pipeline projects —
TransCanada’s Energy East and Keystone XL; Enbridge’s Line 3; and Kinder Morgan’s Trans Mountain.
Bayerische Landesbank, ING, BNP Paribas, Intesa SanPaolo, and DNB have all said they offloaded share of project-level debt for the Bakken Pipeline, and these actions have been welcome, though the pipeline is flowing, and the first spill has already happened.
Last year, while building DAPL, ETP ran up a balance of nearly $3 billion on its $3.75 billion credit facility. Since then, that balance has been paid off, in large party from $2 billion from Enbridge and Marathon. Also, ETE (the parent company) and ET (formerly ETP) have remade their respective $1.5 B and $3.75 B credit facilities.
On the ETE credit facility, TD Bank, Canadian Imperial, Fifth third, and ScotiaBank joined, while Royal Bank of Scotland, ING, Intesa SanPaolo, ABN Amro and DNB jumped off. On the new ET (formerly ETP) credit facility, TD joined, and RBS, Intesa SanPaolo, Community Trust and Deutsche Bank jumped off.
Interpreting these moves, and the public statements of these banks, requires an integrated divestment campaign.
Deutsche Bank is a primary lender to Energy Transfer on numerous other deals, and a primary lender to TransCanada, Kinder Morgan, and Enbridge. Bayerische Landesbank finances Phillips 66.
While DNB and BNP Paribas have both offloaded their project level debt, they have also both renewed their commitments to ET (formerly ETP). In addition, they maintain commitments to Enbridge, Phillips 66 and Marathon, all stakeholders in the Bakken Pipeline, and thus DAPL. They also provide general purpose financing to TransCanada.
ING also offloaded its project level debt but renewed its commitment to lend to ET (formerly ETP), as part of its big credit facility. After likewise renewing its commitment to ET (formerly ETP) in late March, US Bank now says it is committed to a new policy steering away from fossil fuels.
The integrated divestment campaign undertaken and spread by MazaskaTalks.org and the Treaty Alliance will keep these banks from having their cake and eating it too. Money talks, but sometimes “silence is the sound of money talking.”
Banks banking on DAPL and tar sands do so in denial of climate science, and in violation of Indigenous sovereignty. They are banking on maximal North American oil and gas production. They’ve sunk billions into a gravely shortsighted definition of energy and economic security, equating it with widespread drilling, fracking and mining to maximize the amounts of fossil fuel brought to the surface and burned.
Visibility is a first step, to identify which banks are banking on Trump, and which banks are banking for future generations.
Beyond pressure on banks, we have to build the solutions that end dependence on fossil fuels. That requires money. Money talks. The flow of money out of DAPL and tar sands banks — and out of private prison banks financing deportation and detention services support — will snowball. That presents a huge opportunity for local communities to define their own energy and economic security, off fossil fuels.
We must also support the hundreds of Water Protectors facing trumped up charges in North Dakota. Do so at FreshetCollective.org.
By Hugh MacMillan. Hugh is a Senior Researcher at Food & Water Watch focusing on water, energy and climate issues.