Top insurers have become lightning rods in the ballooning climate change battleground as these companies are being pressured to stop underwriting policies for the oil and gas industry.
More than 140 groups, including climate activists, consumer rights and environmental organizations, are calling on companies to stop insuring a new wave of up to 20 liquid natural gas export terminals along the U.S. Gulf Coast, arguing they release large amounts of pollutants into the atmosphere, according to a June letter.
STATE FARM CEASING NEW PROPERTY INSURANCE APPLICATIONS
Already in California, Allstate, one of the U.S.’s largest insurance companies, just joined State Farm in stopping the sale of property and casualty coverage to new customers in the state, saying it’s too costly after literally thousands of natural disasters over the last several years, high costs for housing and general inflation. Allstate also just recently requested a 40% homeowners insurance increase from the California Department of Insurance in April. State Farm, by far the largest property insurer in California, is asking for a 28% boost.
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When it comes to not insuring liquid natural gas terminals, industry officials defend natural gas for driving down greenhouse gas emissions as a cleaner fuel. And the Biden White House pushed LNG exports after Russia invaded Ukraine, seeking to help Europe get itself off of Russian energy.
“Insurance companies literally bet their businesses on their risk assessments and don’t do so lightly. This is their field of expertise. By replacing high-emissions fuels and keeping the power and lights on for the EU during the war in Ukraine, U.S. LNG is ultimately a net positive for the environment and global energy security. U.S. LNG projects are being developed and operating under strict safety regulations with oversight from several federal and state agencies including the Department of Transportation and the U.S. Coast Guard” said Daphne Magnuson of Natural Gas Supply Association and Center for LNG in a statement to FOX Business.
Still, the groups’ letter threatens protests at the offices of these oil and gas executives and a public media campaign, warning “we are no stranger to big fights. We’ve won multi-million dollar lawsuits” and are “involved in the highest level of federal policy conversations.”
Reports from Common Dreams indicate local communities and neighborhoods don’t want the new LNG terminals, having witnessed the explosion at a Freeport LNG terminal on Quintana Island, Texas, last year that sent clouds of toxic pollution over homes and local businesses, injuring several people. The letter added that between 2008 and 2017, 1,566 oil and gas workers died on the job.
Coal companies already have faced difficulties in getting insurance. The group Insure Our Future, which pressures insurers to stop underwriting policies for oil and gas companies, said insurance giant AIG in 2022 joined other companies in stopping the sale of insurance for new coal projects.
AXA SA is the first multinational underwriter to rule out new investments in the coal industry in 2015. It insures Freeport LNG. An AXA spokesperson told E&E News the firm has ceased underwriting new “greenfield” oil and gas developments if they don’t have “sufficient climate transition plans.” E&E first reported on the LNG insurance battle in June.
Groups like Rainforest Action Network, Public Citizen and Oil Change International signed the letter, warning that continued support for liquefied natural gas facilities poses “reputational risks” to insurers. The letter also notes the oil and gas industry spent approximately $124.4 million lobbying the U.S. federal government in 2022.
The U.S. is now tied with Qatar as the largest exporter of LNG in the world.
FOX Business inquires to the American Property Casualty Insurance Association were not immediately returned.
