Oil and gas firms to increase extraction in Arctic by ‘more than 20%’ in next five years

Oil and gas firms plan to increase extraction in the Arctic by more than 20 per cent over the next five years, a new report says.

Analysis by Reclaim Finance, an NGO examining fossil fuel spending, finds that oil and gas production in the fragile region is set to increase from 11.5 million barrels of oil equivalent (mmboe) per day in 2020 to 13.7 mmboe per day in 2026.

Such an uptick in drilling could consume 22 per cent of the world’s available “carbon budget” for keeping global temperatures to 1.5C above pre-industrial levels by the end of the century, the analysis says.

Fossil fuel companies with plans to increase drilling in the Arctic, such as Russia’s Gazprom, French multinational Total and the US firm ConocoPhillips, are being backed by some of the world’s biggest banks and investors, the report adds.

Between 2016 and 2020, commercial banks pledged $314 billion (£230bn) in loans and underwriting to fossil fuel companies looking to expand in the Arctic, the findings show.

The Independent’s Stop Fuelling the Climate Crisis campaign is shining a light on support for fossil fuels ahead of Cop26, the major global climate summit taking place in Glasgow in November.

The analysis, which uses data from the research firm Rystad Energy, comes after a landmark report found that Arctic summer sea ice is declining at a rate of 12.9 per cent per decade amid rapid global heating.

“The Arctic is a climate bomb,” said Alix Mazounie, a report author and campaigner at Reclaim Finance.

“Our research shows that the oil and gas industry is hellbent on setting it off, thus blowing up our chances of avoiding runaway climate breakdown.

“But they are not the only culprits: financial institutions have bankrolled these companies, making a mockery of their own climate commitments.”

Another major report published by the International Energy Agency (IEA) in May said there can be no further fossil fuel expansion if the world is to meet its climate goals.

The biggest funders of Arctic oil drilling were JPMorgan Chase ($18.6bn), Barclays ($13.2bn) and Citigroup ($12.2 bn), according to the new report.

All three banks have made commitments to align their activities with goals to reach net-zero emissions by 2050 or to meet the targets set out in the landmark Paris Agreement.

Prof Peter Newell, an international relations academic at the University of Sussex, described the “irresponsibility” of banks as “breathtaking”.

“Protecting the Arctic is vital to efforts to address the climate crisis,” he told The Independent.

“Instead, at a time of climate emergency and in the year of the critical UN Cop summit, major investors such as JPMorgan Chase, Barclays and Citigroup are actually planning to bankroll companies to increase oil and gas production in the Arctic by 20 per cent in the next five years.

“The irresponsibility of this action by investors is breathtaking and will no doubt lead to widespread protests aimed at preventing it.”

The Independent approached the banks mentioned for comment.

A Barclays spokesperson said: “We have strict prohibitions around the Arctic in order to protect these critically important and fragile ecosystems and the communities that depend on them, and we do not directly finance any oil and gas projects in the Arctic Circle or provide any financing to companies primarily engaged in such activities.

“It is important to note that all oil and gas activities in any region is tracked by our BlueTrack methodology, which sets an absolute financed emissions reduction target covering all our energy financing activity with a decreasing limit that is aligned to the timeline and goals of the Paris Agreement.”