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Dunleavy administration considers hitting back after JPMorgan’s ‘anti-Alaskan’ move to halt Arctic oil investment

  • Author: Alex DeMarban
  • Updated: February 27
  • Published February 27

State and oil industry officials reacted with alarm this week after a second large U.S. bank said it would not support future oil and gas projects in the Arctic, seeing the move as a potential threat to an industry vital to the state’s economy.

On Tuesday, JPMorgan Chase announced a broad initiative to combat climate change and promote renewable energy.

JPMorgan won’t provide financing that "will be used for new oil and gas development in the Arctic,” the bank said in a prepared statement.

The move followed pressure from conservation groups, Democratic lawmakers and leaders from Gwich’in communities seeking to stop drilling in the Arctic National Wildlife Refuge.

Goldman Sachs took a similar position in December, announcing it would not finance new oil projects in the Arctic.

Reaction to the banks’ new policies was mixed among Alaska oil industry insiders. Major projects that will cost billions of dollars and boost oil production in Alaska will need funding to advance.

Bill Armstrong, who owns of Armstrong Oil and Gas and is a North Slope oil explorer who led the discovery of the large Pikka oil prospect, said the announcements might threaten development in Alaska if more banks follow suit.

“This could potentially be a big problem for operators working on the North Slope if it spreads," Armstrong said.

Alaska Oil and Gas Association President Kara Moriarty said some oil companies in Alaska, such as ExxonMobil Corp. or ConocoPhillips, are large enough that they don’t necessarily need to borrow money. There may be no impact, she said.

“If Alaska has competitive projects, the investment will be there,” she said.

Alaska’s political leadership had a stronger reaction to JPMorgan’s announcement and is considering ways to fight back.

Gov. Mike Dunleavy’s administration is reviewing the state’s business relationship with the bank, spokesman Jeff Turner said in an email Wednesday.

“Given the company’s recent actions, a change in the relationship should be expected going forward,” Turner said.

Dunleavy on Tuesday tweeted, “If private companies choose not to invest in Alaska due to the agendas of outside special interest groups, then Alaska has a right to not invest money with groups like @jpmorgan.”

In swift retaliation to Goldman’s announcement in December, the administration removed the bank from the state’s billion-dollar plan to borrow money to pay tax credits to Alaska oil and gas drillers. Goldman had specifically named drilling in the Arctic refuge as one project it will not support.

JPMorgan on Tuesday was more general, not naming specific Alaska projects when it said it would no longer support Arctic oil and gas development.

The bank’s announcement provoked a particularly strong reaction from Alaska’s environmental commissioner, who shredded his Chase credit card in a personal act of defiance. He shared a picture of his destroyed card on Twitter.

“Speaking with my wallet, or rather, no longer speaking with my wallet,” Jason Brune wrote.

Brune called JPMorgan’s announcement “anti-Alaskan.”

In a separate tweet, Brune suggested that the $67 billion Alaska Permanent Fund Corp. should rethink its $950 million investment in JPMorgan funds.

“I’m very concerned,” he said in an interview on Wednesday. “No one does oil and gas development more safely than Alaskans, and banks taking positions like this only forces that demand to be met by other jurisdictions that don’t have the same strong environmental ethics that we have.”

Mike Barnhill, deputy commissioner of the Department of Revenue, has asked for a review of JPMorgan’s business ties with the state, according to State Debt Manager Deven Mitchell.

Mitchell said the state had selected JPMorgan as a co-manager of two bond packages that have not been issued, including the one for the tax credits that Goldman Sachs lost in December.

Mitchell said he did not know if the governor’s office will remove JPMorgan from those bond plans.

John Hendrix, who led Apache Corp. in Alaska until the oil company left the state in 2016, said the decisions by the banks — and growing “anti-carbon” views among Americans — are a threat to investment in Alaska oil fields.

Getting financing for Alaska projects can already be difficult, said Hendrix, who is in the process of acquiring a small Cook Inlet oil and gas company that went bankrupt.

“It’s time for Alaskans to wake up,” he said. “How are we going to live if people don’t put money into our resources?"

"We can’t live on NGO income streams,” he said, referring to conservation groups with the acronym for non-governmental organizations.

Pavel Molchanov, an energy analyst at Raymond James, said backing away from oil and gas investments in the Arctic won’t hurt JPMorgan and Goldman, since the region is a fraction of their potential portfolios.

“They get good PR out of it and it means nothing to them in a financial sense,” he said.

Molchanov said the bigger problem for Arctic projects is that oil prices are still too low to support as much new development compared to Texas, for example. Until those prices rise, there will continue to be limited interest in Alaska and the Arctic, he said.

Before JPMorgan’s announcement, that bank and others had received letters from Democratic lawmakers in the U.S. House and Senate, urging them not to support drilling in the Arctic refuge.

After the Senate sent its letter, Alaska Republican U.S. Sens. Lisa Murkowski, Dan Sullivan and Rep. Don Young sent their own letter to the banks. They called their colleagues “willfully ignorant” of Alaska’s environmental record and Alaska Natives from the North Slope who support drilling in the refuge.

“Our colleagues completely ignored the voices of the Alaska Natives who actually live on the North Slope," the letter said.

That includes Harry Brower Jr., North Slope Borough mayor, the letter noted.

In a January opinion piece in the Wall Street Journal, Brower wrote that Goldman “demonstrated the condescending, subtly racist attitude that too often has been the hallmark of the way Westerners deal with indigenous people.”

JPMorgan and Goldman declined to comment on the reaction in Alaska to their new policies, officials with the banks said Thursday.

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