Local Leaders Commit To Removing About 30 Million Dollars From Bank of the West—But Does It Matter?

Sep 14, 2018

Last week, the city of Rawlins took a concrete stance no city or county in Wyoming yet has, and it might sound odd. They voted to not remove its funds from Bank of the West.

It's a controversial decision because, in August, the French bank BNP Paribas' Bank of the West decided to stop financing, distributing, or marketing all activities within coal, oil, or gas unless it focuses on clean energy.

Bruce Hinchey, president of the Petroleum Association of Wyoming, said, "It struck a nerve in a lot of us."

The decision from Bank of the West also struck a nerve with Wyoming leaders. U.S. Senator John Barrasso called the decision an attack on Wyoming families that depend on fossil fuels. Governor Matt Mead, gubernatorial candidate and state treasurer Mark Gordon, and several state legislators also criticized the decision. Hinchey said this is serious because for him minerals have given so much to the state.

"Our kids are in school that belong to the parents that work in the industry and welders and you name it. It just goes on and on." Hinchey said, "Geologists, engineers. It's a lot of different folks in the state that work for this industry."

He added he would like to see every shop in Wyoming remove its money from the bank.

"I think it makes make a statement if we can do that, just like they made their own statement," Hinchey said.

Broken down graph of the entities currently committed to divest from Bank of the West.
Credit Cooper McKim

The places committed to divesting funds already include Fremont and Sweetwater counties, Worland, Rock Springs, and the Park County sheriff's office. The amount to be removed already totals between $27,947,000 and $32,947,000 not including the sheriff's office which hasn't disclosed its divestment.

Steve Sanger, vice-mayor of Rawlins, disagreed with Hinchey's approach: "You're not teaching a bank that makes more money than your entire state a lesson by taking money out of a bank."

The bank's assets total nearly $89.7 billion. A vote came in front of the Rawlins city council on September 4.

, and Sanger voted against removing its funds from the Bank of the West. The vote was 5 to 1 with only Mayor Robert Grauberger voting in favor.

Sanger said he voted to keep funds with the bank for several reasons. First, it wasn't the Rawlins' local branch or any other in Wyoming that decided to turn away from fossil fuels. It was their parent company, BNP Paribas, the eighth largest bank in the world.

"I don't see any reason why I should penalize them for the good work that they've done here," Sanger said.

And he added it's not as if mineral companies in the area rely on the bank to fund operations, either.

"That's not why the money was there in the first place. The money was there to make local lending decisions, not invest in 1,500 wells in the Atlantic rim," he said.

No oil and gas company in the area attested to having funds from the bank, and of the many companies contacted for this story, few cared about Rawlins city council's or Bank of the West's decisions. One company with two wells in Carbon County didn't have any strong opinions either way. A coal insider said Bank of the West's commitment won't amount to much. Only one oil and gas company explicitly disavowed the bank's move and hoped to see further divestment.

University of Wyoming professor of petroleum and natural gas economics Chuck Mason said that apathy may be because mineral companies in Wyoming likely won't be affected by the bank's decision. Large oil, gas, and coal companies rely on much bigger financing institutions.

"I very much doubt that Alpha Coal will need get its funding from Bank of the West. They'll find somebody else, probably a venture capital," Mason said.

BNP Paribas' Bank of the West logo.
Credit BNP Paribas' Bank of the West

He said, if Bank of the West won't feel the loss of Wyoming's funds, and the mineral companies won't be affected, the approximately $30 million already committed to divest from local banks will mainly function as a statement.

"I think this is an awful lot of posturing here that, to my mind, doesn't really amount to much," Mason said.

In an e-mail, a representative from Bank of the West responded to its move away from fossil fuels has been a long-term commitment. Its parent company stopped financing coal-fired power plants back in 2015, signed the Paris Climate agreement that same year, and committed to move away from fracking and tar sands in 2017. But it wasn't until this past August's press release that Wyoming leaders took issue with the stance.

Nate Davidson, Rawlins Bank of the West branch manager, gets it, though. Back at the Rawlins city council meeting, he said its message was misconstrued and seemed negative.

"If you put out negative, you're probably going to get negative in return," Davidson said.

Several more counties and cities are considering removing funds from Bank of the West. Laramie County is likely to remove $16 million from the bank. Albany County Treasurer Linda Simpson said representatives from Bank of the West will speak to the Wyoming Association of County Officers at the end of September.