Over 100 frontline and climate groups have written to the biggest banks, insurance companies and private equity backing liquefied methane gas (LNG), demanding they follow the dramatic change in US policy on the sector and to end their financial support.
The organizations, including Texas Campaign for the Environment, Sierra Club, Rainforest Action Network and Friends of the Earth, cite financial risk and reputational damage through continued funding of LNG in letters to US, Japanese, Canadian and European banks, insurance companies and private equity. The companies include Citi, Bank of America, Royal Bank of Canada, Mizuho, Chubb, Liberty Mutual, and KKR.
The groups are demanding an end to funding and insurance underwriting “for new and expanding liquified methane gas projects and their parent companies, including all projects that have not been built or reached a final investment decision”.
The letters warn the future of LNG is in “serious doubt and the potential of new facilities quickly becoming stranded assets is real”. Companies should follow President Biden’s urging to listen to frontline communities and young people fighting the LNG build out, the letter adds. The groups have given the banks, insurance companies and private equity until February 15 to reply.
Without the backing of financial institutions, LNG expansion would be unviable. The top 60 banks have provided $122 billion in loans and bond underwriting to LNG projects and companies involved in the sector since 2016. Fossil fuel insurance earned the industry around $21.25 billion in 2022. Nearly 86% of the operating LNG export terminals in the country have some private equity investment.
“The world said in Dubai it was time to transition away from fossil fuels--this means that no one should view LNG as safe, either for the climate or as an economic asset. The world has begun to move, and that move will accelerate."”
“Families and communities that live beside methane flaring, leaks and even explosions welcome the change in US policy, but it’s just the start. It’s now up to the financiers and insurers of LNG to listen to us, hear stories of the impact on our kids’ health and end the financial backing of this dying industry.”
“U.S. regulators are finally reevaluating their approach to the dangerous and destructive methane gas industry. With the Department of Energy stopping the rubber stamping of new LNG export projects in order to consider their full impact on our climate, communities and economy, it's time for the financial sector to do the same. The message is clear: there is no place for LNG expansion in a net-zero future.”
“Major fossil fuel financiers like Citi and RBC should read the signs that the fossil fuel era is over, and end their financing for methane gas expansion now. Liquefied methane gas is toxic for the health of frontline and climate-impacted communities, and a bad investment for banks. It’s time for fossil banks like Citi and RBC to stop holding us back from a climate-safe world.”