(Oil Price) – The Trump Administration is pushing the World Bank to boost funding for oil and gas in what would be a U-turn in the lender’s policy not to finance new fossil fuel projects.
Back in 2017, the World Bank Group said it would no longer finance upstream oil and gas after 2019. But the group noted that “In exceptional circumstances, consideration will be given to financing upstream gas in the poorest countries where there is a clear benefit in terms of energy access for the poor and the project fits within the countries’ Paris Agreement commitments.”
The U.S. Administration is now pushing for more developments, especially upstream gas, prioritizing energy security to any concerns about climate change, development officials have told the Financial Times.
The U.S. is also pushing other development banks to finance fossil fuels, including gas pipeline projects, according to FT’s sources.
In recent years, the World Bank and many commercial banks have backed out of lending money to some fossil fuels, including coal, oil sands, and Arctic oil and gas. Banks were under intense shareholder and stakeholder pressure to cut their exposure to fossil fuels and align their lending portfolios to the Paris Agreement goals.
But the tables have turned with the U.S. Administration strongly promoting fossil fuels and America’s dominance in oil and gas exports.
“An all-of-the-above energy strategy that provides for the financing of upstream gas would be a positive step towards reconnecting the World Bank, and all other multilateral development banks, to their core missions of economic growth and poverty reduction,” a spokesperson for the U.S. Treasury Department told FT.
After years of scrutiny and blacklisting from Republican states in the U.S. and lawsuits from Republican attorney generals, North American banks and asset managers began quitting net-zero alliances en masse following President Trump’s election victory.
The top U.S. banks and four of Canada’s largest banks are no longer part of the Net-Zero Banking Alliance (NZBA), a group of leading global banks committed to aligning their lending, investment, and capital markets activities with net-zero greenhouse gas emissions by 2050.
By Michael Kern for Oilprice.com
