Hailey Johnson
The Dakota Access Pipeline (DAPL) is a 1,172-mile pipeline that would carry oil from North Dakota across four states. The project has faced mass protests, particularly at the Standing Rock Sioux Reservation, due to its potential threat to sacred sites, water sources, and the environment. As a result, several banks have faced pressure to withdraw their funding from the project. While some banks, such as ABN AMRO, ING, BayernLB, and Nordea, have announced their withdrawal from financing the pipeline or its backers, others like US Bank, JP Morgan Chase, Bank of America, and Wells Fargo have been criticized for their continued financial support. This has led to calls for customers to boycott these banks and switch to more socially responsible alternatives.
| Characteristics | Values |
|---|---|
| Banks that funded the Dakota Access Pipeline | US Bank, JP Morgan Chase, Bank of America, Wells Fargo, Credit Suisse, Royal Bank of Canada, Suntrust Bank, BNP Paribas, HSBC, Citibank, Morgan Stanley, Goldman Sachs |
| Banks that stepped away from funding | ABN AMRO, ING, BayernLB, Nordea, DNB, BNP Paribas |
| Number of banks funding the project | Nearly 40 |
| Cost of the project | $3.8 billion |
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What You'll Learn
- US Bank, JP Morgan Chase, and Bank of America are among the 40 banks funding the project
- In 2017, six banks stepped away from the project, including ABN AMRO and ING
- The Dakota Access Pipeline (DAPL) would carry oil across four states
- The pipeline is expected to cost $3.8 billion, with $3.75 billion on credit
- The Standing Rock Sioux tribe has been fighting the project since 2014
US Bank, JP Morgan Chase, and Bank of America are among the 40 banks funding the project
The Dakota Access Pipeline (DAPL) is a 1,172-mile pipeline that would carry oil from North Dakota across four states. The project has faced widespread criticism and protests, particularly from the Standing Rock Sioux tribe, who argue that the pipeline threatens their sacred sites, water supply, and burial grounds.
US Bank, JP Morgan Chase, and Bank of America are among the nearly 40 banks that have provided financial support for the Dakota Access Pipeline. Other banks involved include Wells Fargo, Citibank, Goldman Sachs, and more. The funding from these banks has been crucial for the pipeline's construction, with an estimated $3.75 billion of the $3.8 billion cost being funded through credit.
Some banks have responded to the controversy by withdrawing their financial support. In February 2017, ABN AMRO, ING, BayernLB, and Nordea announced they would no longer finance the project or its backers. ING, for example, sold its $120 million share of loan debt to DAPL, and BayernLB stated it would withdraw its $120 million investment. These decisions were influenced by public pressure and engagement with the Standing Rock Sioux tribe.
The involvement of banks in the Dakota Access Pipeline highlights the impact of financial institutions on environmental and social issues. While banks have the power to enable such projects, they also have the ability to stop them by withdrawing funding. As a result, activists have targeted these financial institutions, urging them to pull their funds from the project and calling for consumers to boycott these banks.
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In 2017, six banks stepped away from the project, including ABN AMRO and ING
In February 2017, six banks stepped away from the Dakota Access Pipeline project, including ABN AMRO, ING, BayernLB, and Nordea. The banks announced they would no longer finance the project or its backers. This came after months of protests against the pipeline by the Standing Rock Sioux Tribe and their allies, who argued that the pipeline threatened their sacred sites and water supply.
ING was the first bank to sell its portion of the project loan supporting the pipeline, followed by DNB and BNP Paribas. These banks had faced pressure from environmentalists and indigenous rights activists to withdraw their support for the pipeline. In March 2017, ING committed to "stop doing any new business with the companies [behind the pipeline], not renewing credit facilities that expire, effectively ending the relationship."
ABN AMRO also took a strong stance, announcing that it would end its financing for Energy Transfer Equity (ETE) if the Dakota Access Pipeline (DAPL) was constructed without the consent of the Standing Rock Sioux Tribe or if further violence occurred. The Dutch Fair Finance Guide, Greenpeace Netherlands, and BankTrack welcomed ABN AMRO's decision and called on other banks to follow suit.
The decision by these six banks to step away from the Dakota Access Pipeline project was a significant development in the efforts to stop the pipeline's construction. It demonstrated the power of public pressure and the growing awareness of indigenous rights and environmental concerns among financial institutions.
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The Dakota Access Pipeline (DAPL) would carry oil across four states
The Dakota Access Pipeline (DAPL) is a 1,172-mile-long (1,886 km) underground pipeline that has the capacity to transport up to 750,000 barrels of light sweet crude oil per day. The $3.78 billion project was announced in June 2014 and construction began in June 2016. The pipeline runs from the shale oil fields of the Bakken Formation in North Dakota, through South Dakota and Iowa, to an oil terminal near Patoka, Illinois. It crosses 50 counties in four states and does not cross any land owned by the Standing Rock Sioux Tribe.
The pipeline is owned by Energy Transfer (36.4% stake), MarEn Bakken Company LLC, and Phillips 66 Partners. The project cost $3.78 billion, of which $2.5 billion was financed by loans, while the remaining capital was raised by the sale of ownership stakes. Several banks have provided credit for the project, including Bank of America, Credit Suisse, Royal Bank of Canada, Suntrust Bank, BNP Paribas, HSBC, Citibank, Morgan Stanley, Wells Fargo, JP Morgan Chase, and more.
There has been significant opposition to the pipeline, particularly from environmentalists and indigenous rights activists. Protests at Standing Rock gained widespread attention, and some banks, such as ABN AMRO, ING, BayernLB, and Nordea, have withdrawn their financing for the project due to public pressure. The pipeline has also faced legal challenges, with the Army Corps of Engineers intervening to examine alternative routes and the UN sending a representative to monitor the situation.
Despite the controversy, the Dakota Access Pipeline is operational and has provided millions in tax revenue for local communities. It has also contributed to increased energy security, a lower trade deficit, and boosted economic growth.
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The pipeline is expected to cost $3.8 billion, with $3.75 billion on credit
The Dakota Access Pipeline (DAPL) is a highly controversial project that has faced staunch opposition from environmentalists and indigenous rights activists. The pipeline's construction costs are estimated at $3.8 billion, with a significant portion, $3.75 billion, being financed through credit. This reliance on credit underscores the critical role of banks in enabling such projects to materialise.
The funding landscape for the DAPL has been dynamic, with several banks withdrawing their support due to public pressure and concerns over indigenous rights and environmental impact. Notably, ABN AMRO, ING, BayernLB, and Nordea announced their departure from the project in February 2017. This was followed by DNB and BNP Paribas divesting their shares in the loan.
Despite these exits, several major banks have continued to provide financial support for the DAPL. Financial documents from Energy Transfer Partners, the pipeline builder, revealed that institutions such as Credit Suisse, Royal Bank of Canada, Suntrust Bank, HSBC, Citibank, Morgan Stanley, Wells Fargo, Bank of America, and JP Morgan Chase have extended credit for the project.
The role of banks in funding fossil fuel projects has come under increasing scrutiny. A 2018 report highlighted that major banks funnelled $115 billion into extreme fossil fuel ventures in 2017, marking an 11% increase from 2016. This surge in funding has contributed to the expansion of sectors like tar sands, which present significant environmental concerns.
The DAPL's estimated cost of $3.8 billion is substantial, and the project's reliance on credit underscores the financial sector's pivotal role in shaping the energy landscape. The pipeline's cost per kilometre is likely to be considerable, given the median cost for US onshore gas pipeline projects in 2015-2016 was $4.75 million per kilometre. This figure includes various cost categories such as materials, labour, surveying, engineering, and regulatory fees.
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The Standing Rock Sioux tribe has been fighting the project since 2014
The Standing Rock Sioux tribe has been fighting the Dakota Access Pipeline project since 2014. The 1,172-mile-long pipeline crosses Lake Oahe, within a mile of the tribe's reservation in North Dakota. The tribe argues that the pipeline violates Article II of the Fort Laramie Treaty, which guarantees the "undisturbed use and occupation" of reservation lands. They also fear that an oil spill would threaten their water supply and cultural resources.
The controversy surrounding the pipeline escalated in 2016 when it received its first permits for construction. Large-scale, grassroots protests emerged, and the Standing Rock Sioux tribe organised runs, horseback rides, and marches to demonstrate their opposition to the pipeline. The protests brought attention to the dangers of fossil fuel infrastructure and the unjust treatment of Indigenous Peoples in the United States.
The Standing Rock Sioux tribe has also pursued legal action against the pipeline. Earthjustice, a nonprofit environmental law organisation, has represented the tribe in their legal challenges. In 2020, the D.C. District Court ordered the shutdown of the Dakota Access Pipeline.
In addition to the tribe's efforts, there have been calls for banks to stop funding the pipeline. In 2017, several banks, including ABN AMRO, ING, BayernLB, and Nordea, announced they would withdraw their financing. This was partly due to public pressure and concerns about the project's impact on Indigenous rights and the environment.
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Frequently asked questions
Yes, US Bank is one of nearly 40 banks that financially supported the controversial Dakota Access Pipeline.
Other banks that funded the project include JP Morgan Chase, Bank of America, Wells Fargo, Citibank, Goldman Sachs, HSBC, Credit Suisse, Royal Bank of Canada, Suntrust Bank, and BNP Paribas.
The Dakota Access Pipeline was a 1,172-mile pipeline that would carry oil from North Dakota across four states. The project faced mass protests at the Standing Rock Sioux Reservation, with thousands of people descending on the area. The protesters, calling themselves "water protectors", feared that the pipeline would desecrate their sacred sites and threaten their water supply.
