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Banks urged to stop funding Shell if it proceeds with Jackdaw gas field

Climate activists have urged banks to sever financial ties with Shell if it goes ahead with plans to develop a controversial new gas field in the North Sea. 

The UK Government provided “final regulatory approval” for the oil giant’s Jackdaw project on Wednesday in a move which has been met with anger by environmentalists.  

They argue that the new field is incompatible with efforts to limit global warming to 1.5 degrees – the goal set by the 2015 Paris Agreement which is viewed as paramount if the world is to maintain a liveable climate for all.

Four campaign groups — 350.org, BankTrack, Uplift and Bank on our Future — have today sent a letter to the 25 biggest financiers of Shell calling on them to “terminate their financial relationship” with the oil giant if it continues with its plans for Jackdaw. 

A spokesperson for Shell said that the project has “the potential to produce 6.5 per cent of UK gas at a time when UK energy security is critically required” due to high prices and the war in Ukraine

But campaign groups argued that Jackdaw is “completely incompatible with global climate goals”. They claimed  it “won’t do anything to reduce household energy bills now” and that “the short term profits of fossil fuel companies” were being placed above people and planet. 

Among the firms sent the letter by the campaigners were Shell’s five biggest financial backers – BNP Paribas, Morgan Stanley, Barclays, Santander and HSBC. 

In total, Shell has received over £34bn of funding from the world’s biggest banks since 2016, the year after the Paris Agreement was signed. 

The letter also calls on the financial giants to engage with Shell and urge them to stop the project, and to rule out direct financing of the field. 

All five of the banks have committed to making their businesses produce net-zero climate emissions by 2050. They are also members of the Net Zero Banking Alliance (NZBA), a UN scheme aimed at getting banks to align their investment and lending portfolios with efforts to reach net-zero. 

In May 2021, the International Energy Agency (IEA) argued that “no new oil and gas fields are required” if the world is to limit global warming to 1.5 degrees against pre-industrial levels. 

Meanwhile, a report earlier this month argued that Shell’s climate plans were “grossly insufficient” to meet the 1.5 degree target because the company continues to approve new fossil fuel extraction projects.  

If warming exceeds 1.5 degrees it is expected to “exacerbate hunger, conflict and drought worldwide”. Scientists believe that average global temperatures could surpass this threshold by 2033 without “extremely rapid cuts to greenhouse gas emissions”. 

Jackdaw is one of the biggest remaining gas fields in the North Sea and has the potential to produce the gas equivalent of between 120 and 250 million barrels of oil

It is viewed as a particularly polluting field due to its high carbon dioxide content and plans to “clean” the gas using a process which would vent pollution directly into the atmosphere. Shell’s initial application to develop the field was rejected by UK regulators last year on environmental grounds. 

Protests were held across the UK yesterday following the decision to give Jackdaw the green light. In Edinburgh, activists threw red paint over UK Government offices and held up banners claiming that the government had “blood on its hands”

Tommy Vickerstaff, a campaigner at 350.org, argued that the UK Government should be investing in housing insulation or energy efficiency measures” but was instead approving a project that will produce “more emissions than some countries”.

Vickerstaff said: “Approving Jackdaw won’t do anything to reduce household energy bills now.

“This is once again a misguided and dangerous decision that places the short term profits of fossil fuel companies like Shell over the needs of people and the future of our planet.”

Natasha Ion, a campaigner at BankTrack, noted that “the banks financing Shell have a responsibility of their own to reduce emissions.”

They said: “We know that we can’t afford any more fossil fuel expansion if we are to limit warming to 1.5C, so a project like Jackdaw is completely incompatible with global climate goals.

“We strongly urge banks to engage with Shell to terminate the project, or reconsider their ties with the company.”

A Shell spokesperson said: “Having initiated Jackdaw a number of years ago, we welcome the consent received today. We plan to move ahead with the project, which has the potential to produce 6.5 per cent of UK gas production at a time when UK energy security is critically required.

“Responsibly produced, local gas production plays an essential role in the UK’s transition to net zero, will support thousands of jobs and forms part of Shell UK’s broader intent to invest £20 to £25 billion in the UK, with 75 per cent intended for low and zero-carbon products and services.  

“However, as we have repeatedly stated this can only happen with a stable fiscal policy and we continue to look to the government for those assurances.”

The Ferret has contacted BNP Paribas, Morgan Stanley, Barclays, Santander and HSBC for comment.

Photo Credit: iStock/beaucroft

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