JP Morgan under fire from US Congress over fossil lending

Members of US Congress have written to JP Morgan’s CEO, Jamie Dimon, to express concerns that the bank’s fossil fuel lending practices “are putting US taxpayer funds at risk”.

Sent earlier this week, the letter is signed by Ro Khanna, Chair of Congress’ Subcommittee on Environment Committee on Oversight and Reform, and Katie Porter, Chair of its Oversight and Investigations Subcommittee Committee on Natural Resources.

The pair claim that lending to the oil and gas industry risks destabilising financial markets and “creates billions of dollars in environmental clean-up costs, which are often passed on to taxpayers”.

There are millions of abandoned oil wells across the US alone, many of which release methane into the atmosphere. The cost of plugging those wells is estimated by the US Government Accountability Office to be some $300bn. This figure is set to increase as more oil and gas companies go bankrupt, leaving their wells behind. 

The letter says that, as JP Morgan is “the biggest banker for the oil and gas industry worldwide… Congress must have confidence that [it] will not make taxpayers responsible for the bank’s high-risk investment in the oil and gas industry”. 

It asks for further information from JP Morgan to help the Subcommittee on Environment oversee taxpayer risks posed by bank lending to the oil and gas industry, by no later than July 6th. This should include details of how much debt it had in oil and gas companies at January 2020, and its revenue from the industry between 2017 and 2019. 

The letter also asks for copies of all documents written between March and September 2020 that estimate or assess the number of oil and gas clients that went bankrupt, were predicted to go bankrupt, or were expected to go bankrupt without federal assistance; as well as any since January 2016 that estimate the cost of dealing with oil wells left behind by JP Morgan’s clients.

A spokesperson for JP Morgan declined to comment on the letter.