The courageous stand against the Dakota Access Pipeline, led by indigenous nations and especially the Dakota and Lakota people of the Standing Rock Sioux, has sprouted a divestment campaign targeting the pipeline’s major creditors. A September report by Food and Water Watch noted that 38 banks have financed the companies building the pipeline, most notably Energy Transfer Partners (ETP), which owns a controlling three-quarters interest in the so-called Black Snake.
The Dakota Access Pipeline is a 1,170-mile underground monument to North America’s fracking boom linking North Dakota’s prodigious Bakken oil patch to East Coast and Gulf Coast transmission routes, and is backed by $10.25 billion in financing overall, the Food and Water Watch tally revealed.
Wells Fargo is the US’ most controversy-laden bank of the moment, owing to the revelation that it reaped hundreds of millions of dollars in extra profits by opening roughly two million bogus customer accounts from 2011 to ’15. The fact that it is the Dakota Access Pipeline’s second largest financial backer, with $467 million invested to date, is therefore an attention-grabber in itself. But Wells Fargo also acts as Energy Transfer Partners’ so-called “administrative loan agent,” the company’s Securities and Exchange Commission filings show, giving it a qualitatively greater role in fueling the pipeline than any other bank.
Wells Fargo performs all record-keeping associated with all of ETP’s loans, handles the interest and principal payments made in connection with those loans, and monitors their ongoing administration. In other words, all bank financing ETP receives passes through Wells Fargo.
This relationship did not emerge in a vacuum. In 2014, Wells Fargo assumed the mantle of Wall Street’s top oil and gas banker, having more aggressively ramped up its investments than any other following the 2008 economic crash. One of Wells Fargo’s executive vice presidents, Mike Johnson, bragged about the San Francisco-based banking giant’s top role in fueling these planet-cooking sectors at a 2014 investors conference, and industry analyst Thompson Reuter has also made note of it.
Wells Fargo exerts leadership within the oil and gas sector in other ways. It organizes an annual conference for oil and gas pipeline investors, called the “Wells Fargo Pipeline, MLP, and Utility Symposium.” This year’s gathering – the 15th annual – takes place at New York City’s Waldorf Astoria on December 6th-7th. The keynote speaker “will address the growing challenges of building new pipeline infrastructure including rights of way, eminent domain, environmental impact and governmental approvals,” according to the brochure.
Wells Fargo’s logo consists of a red and gold six-horse stagecoach rolling along the frontier. The annual West Coast Energy Conference takes place in San Francisco, connecting leading investors and professionals to the companies on the frontier of the oil, gas and coal sectors, as well as some who are involved in renewables, all with a disproportionate emphasis on shale oil investment. Large financial institutions in general – including the 38 invested in the Dakota Access Pipeline – have actively cultivated the North American oil boom of recent years, yielding them hundreds of billions of dollars in new profits. In 2014, the U.S. passed Saudi Arabia as the planet’s biggest oil producer, with the active support of the Obama administration and the US Congress. It surpassed Russia as the world’s biggest producer of oil and gas combined. Two shale oil basins in particular have helped spur the production surge: the Eagle Ford in south Texas and the Bakken oil shale in North Dakota. Investors have noted the importance of pipeline construction. A 2012 Citibank report called “Energy 2020: North America, the New Middle East” notes that “the economic consequences” of the oil and gas industry’s “supply and demand revolution are potentially extraordinary,” and touts that “infrastructure investments ease the transport bottlenecks in bringing supply to demand centers.” It also sounds a cautionary note: “The only thing that can stop this is politics-environmentalists getting the upper hand over supply in the U.S., for instance; or First Nations impeding pipeline expansion in Canada; or Mexican production continuing to trip over the Mexican Constitution, impeding foreign investment or technology transfers – in North America itself.”
Barack Obama has also touted the importance of pipeline construction, giving special mention to North Dakota and Colorado. Here’s the US president at a 2012 campaign stop in Cushing, OK: “Over the last three years, I’ve directed my administration to open up millions of acres for gas and oil exploration across 23 different states. We’re opening up more than 75 percent of our potential oil resources offshore. We’ve quadrupled the number of operating rigs to a record high.” He continued, “We’ve added enough new oil and gas pipeline to encircle the Earth, and then some.?.?.?.?In fact, the problem?in places like North Dakota and Colorado is that we don’t have enough pipeline capacity to transport all of it to where it needs to go – both to refineries, and then, eventually, all across the country and around the world. There’s a bottleneck right here because we can’t get enough of the oil to our refineries fast enough. And if we could, then we would be able to increase our oil supplies at a time when they’re needed as much as possible.” Wells Fargo serves as an administrative agent for numerous other pipeline companies, in addition to Energy Transfer Partners. These include the US’ largest pipeline operator, Enterprise Product Partners of Houston, as well as the second largest, Plains All American Pipeline (responsible for last year’s oil Refugio Oil Spill near Santa Barbara, CA). Wells Fargo was sole adviser to TransCanada Corp on its July 2016 acquisition of Columbia Pipeline Group, a deal worth $13 billion including debt, bringing in Wells Fargo’s biggest fees from a single deal since at least 2000, according Thomson Reuters and Freeman Consulting Services.