Opposition to the Dakota Access Pipeline that runs near two tribes’ lands in North Dakota has become a galvanizing cause for tribes and environmental supporters nationally and locally.
In a bid to send a message about such investments in oil pipelines, the Seattle City Council voted this week to ditch its bank, Wells Fargo & Co., which according to the Seattle Times has provided about $120 million in financing for the 1,200-mile project estimated to cost $3.8 billion.
The move was the first by a major U.S. city specifically over the Dakota-to-Illinois pipeline. Several cities have started to curb their use of Wells Fargo, and Seattle previously cut off new investments there, over Wells Fargo’s scandalous opening of millions of new bank and credit accounts for customers without permission.
Seattle’s move reflects a shift to seeking socially responsible contractors that don’t engage in unfair business practices. The city would stop moving more than $3 billion-a-year through its Wells Fargo accounts after December 2018.
Members of the Olympia City Council have suggested our capital city could follow Seattle’s lead by ending its relationship with its banker, U.S. Bank. The reason? U.S. Bank provided some financing to one of the pipeline investors, Energy Transfer Partners.
Our advice: Not so fast. While we understand the urgency to support the Standing Rock tribe based on the rapid development of the pipeline under the new administration, the idea needs grounding in a real-world analysis about what is possible and financially in the best interest of the city.
If Olympia drops U.S. Bank, what criteria will it use for a replacement bank? Is there any financial institution that is pure enough to satisfy what City Councilman Nathaniel Jones and others seem to want? Does the time, money and energy put into this deserve priority over other city concerns like housing?
Councilman Jim Cooper, who chairs the council’s finance committee, said he is still investigating implications of a bank switch. In the past, he said the city could not find a local bank able to handle the size of its accounts. Whatever happens, Cooper noted that Olympia has bond debt payments that would continue to be made at U.S. Bank.
Next month, Cooper wants to look at all of the city’s investments through a social-responsibility lens. That is fair but by the time the city can act, the pipeline may be moving oil.
After the Army Corps of Engineers rejected permits to complete the project last December because of concerns about environmental review and inadequate consultation with two affected tribes, President Donald Trump ordered the project to move ahead early this month. Work on the Dakota Access project resumed this week after the Corp approved an easement for the final piece of the pipeline under Lake Oahe and the Missouri River.
The Standing Rock Sioux tribe filed a legal challenge to block the project.
A better focus for the city is a broad look at the business practices it wants to support with public dollars.