Opponents of a proposed natural gas pipeline in Virginia are starting a divestment campaign, a tactic that has grown in popularity among climate and anti-pipeline activists in recent years, to persuade banks to end their financing of the Mountain Valley Pipeline.
Landowners and environmentalists opposed to the southwestern Virginia pipeline are calling on customers to move their money out of the top six U.S. banks behind the pipeline, led by Bank of America and Wells Fargo. The “Defund MVP” campaign joins a growing movement of communities, tribes, and, cities across North America — from the Keystone XL pipeline to the Dakota Access Pipeline — that are targeting the financing behind pipeline projects.
“Our analysis shows that Bank of America and Wells Fargo are signed up to funnel the most money into this polluting pipeline,” said Lorne Stockman, a senior research analyst at Oil Change International who co-authored a new report on how the Mountain Valley Pipeline would be financed. “These same banks are embroiled in a backlash over their funding for the Dakota Access Pipeline and major tar sands pipelines. The Mountain Valley Pipeline is another black eye.”
Bold Appalachia and Protect Our Water, Heritage, Rights are spearheading the divestment campaign. The groups contend that residents in southwestern Virginia are concerned that the proposed pipeline would “open up a new spigot” to increase the flow of shale gas produced in Pennsylvania and West Virginia. They fear the pipeline project could harm drinking water, forests, farms, and historic places along the pipeline’s route from northwestern West Virginia to south central Virginia.
Another pipeline that would travel through Virginia, the Atlantic Coast Pipeline, has drawn even greater attention from residents opposed to the project. Like the Mountain Valley Pipeline, the Atlantic Coast Pipeline would transport fracked gas from Pennsylvania and West Virginia to customers in Virginia and North Carolina.
Opponents of the Atlantic Coast Pipeline have not started an official divestment campaign against banks financing the pipeline project, but campaigners are studying the issue and looking at options, Oil Change International spokeswoman Kelly Trout said in an email.
A previous Oil Change International analysis showed the Mountain Valley Pipeline project would be responsible for close to 90 million metric tons of greenhouse gas emissions annually, equivalent to 26 coal plants or 19 million vehicles on the road.
Environmentalists argue new pipelines like the Atlantic Coast Pipeline and Mountain Valley Pipeline will prevent the United States from meeting its climate goals and will bake in natural gas dependency for another generation.
They contend that getting large institutions and individuals to divest from banks that are financing fossil fuel projects is an effective tactic for reducing greenhouse gas emissions. In February, Seattle’s city council, for example, voted to sever the city’s ties with Wells Fargo over the bank’s funding of the Dakota Access Pipeline.
In March, two members of the Los Angeles city council introduced a motion calling on the city to divest funds from Wells Fargo bank in protest of the bank’s financial support of Dakota Access. A coalition in Washington, D.C., is pushing the city government to cut ties with the bank over its investments in the pipeline.
Opponents of the Mountain Valley Pipeline, a 301-mile, $3.5 billion pipeline project, are hoping their divestment campaign also captures the attention of cities and institutions that do business with the banks financing the pipeline.
EQT Midstream Partners, a subsidiary of EQT Corporation, is the company with the largest ownership stake and investment in the Mountain Valley Pipeline, owning 45.5 percent of the joint venture, according to the report. EQT has a 20-year contract with EQM to ship 1.29 billion cubic feet per day of natural gas through the Mountain Valley Pipeline, which accounts for nearly 65 percent of the project’s target daily capacity.
“The Mountain Valley Pipeline is a central piece of both EQM’s and EQT’s long-term plans for growth,” the Oil Change International report says. “The companies are planning on the pipeline to serve as a key conduit to monetize EQT’s gas reserves.”
EQM’s primary existing borrowing arrangement is a $750 million revolving credit facility — a type of loan — that the company established in February 2014 with commitments from 18 different banks. “The corporate funding of EQM is directly linked to the Mountain Valley Pipeline project, which strengthens the call for divestment,” Oil Change International’s Trout said.
In a statement emailed to ThinkProgress, EQM explained it has relationships and conducts business transactions with various banking entities, some of which support the company’s overall credit facility. “As discussed in the company’s quarterly and annual filings, the credit facility is available, should EQM choose to use it, to support any of EQT Midstream Partners’ several projects and programs,” EQM said.
A total of 18 banks finance EQM’s $750 million credit facility and 11 of those same banks, including subsidiaries, financed the recent bond offering. Bank of America, Wells Fargo, PNC, SunTrust, and U.S. Bank are each funding EQM’s credit facility and each purchased significant amounts of EQM’s recently issued senior notes, according to Oil Change International.
Roanoke, Virginia-based RGC Midstream entered into a five-year $25 million credit agreement with Union Bank & Trust and Branch Banking & Trust in December 2015 for the express purpose of financing its 1 percent stake in the Mountain Valley Pipeline, Oil Change International explains in the report.
“The Mountain Valley Pipeline route is going through the middle of my property, Doe Creek Farm,” Georgia Haverty of Giles County, Virginia, said in a statement. “There are four businesses that would be directly and adversely affected. I will never put a cent of any of my businesses in BB&T, Bank of America, Wells Fargo, or Union Bank & Trust. I will also post signs calling out all of these banks for the thousands of visitors and customers who visit each year and who love this land. They need to know.”
Bank of America is providing about $141 million in financing to EQM, which equates to nearly 9 percent of the company’s share of the cost of the Mountain Valley Pipeline. Wells Fargo, PNC, and SunTrust are each funding EQM with $86 million, while U.S. Bank and BNP Paribas follow at roughly $76 million, according to Oil Change International.