El Paso Electric Co. (EPE)–a private equity firm owned by JP Morgan Chase Bank–is profiting off the Permian Basin’s unprecedented level of fracking. By adding a new gas plant, they are locking in El Paso’s climate destruction for the next 20 years–but not if we stop it first.
Recently, with JP Morgan as their owners, El Paso Electric Co. (EPE) lobbied the Texas Public Utilities Commission and the New Mexico Public Regulation Commission to approve an entirely new 228-megawatt Natural Gas generator, called “Newman 6” in Northeast El Paso. EPE and JP Morgan have so far successfully lobbied Texas PUC to approve of this project despite opposition from the City of El Paso (who intervened on minor ratepayer issues, not on climate justice arguments). Yet, the New Mexico Public Regulation Commission has not decided on the approval of this new fracking infrastructure.
Many environmental allies, including Earthjustice, have made interventions to oppose this natural gas plant. Now, Earthworks, Sunrise El Paso, and other local community organizers are planning to launch a campaign to ensure that El Paso’s municipal government demands autonomy over its city and opposes the natural gas plant–regardless of PUC or NMPRC.
Making an electricity utility unaccountable to the public
To the disappointment of local environmentalist and community organizations, and despite warnings from a nationwide consumer advocacy group, the Federal Electric Regulatory Commission (FERC) gave their final stamp of approval to a heavily-contested, $4.3-billion merger of El Paso’s electric utility–a decision which may determine the city’s clean energy prospects for decades to come. Baring a long-shot decision from the Nuclear Regulatory Commission, an investment firm controlled by J.P. Morgan Chase has bought out El Paso Electric Co. and transformed it from a publicly-traded company into a private equity firm–making the utility less accountable to the public and less amenable to the community’s clean energy demands.
The local chapter of the Sunrise Movement vehemently argued against the buyout on the grounds of climate justice, economic justice, and increased public control over electricity. Although J.P. Morgan Chase Bank was fined $410 million for manipulating electricity prices in 2010, EPE nonetheless enthusiastically defended the merger. El Paso City Council went along with EPE and JP Morgan, voting 4-5 in favor of the deal.
As the largest financier of the climate crisis, a bank that has been fined over $35 billion for financial crimes, and a corporation that has been penalized for illegally inflating electric rates on consumers through market manipulation, JP Morgan is one of the worst institutions imaginable to shepherd El Paso’s transition to clean energy, which is necessary if the world is to avoid climate catastrophe.
In El Paso, the world’s tenth sunniest city, EPE only uses 3% solar energy. Tragically, dirty fracking is El Paso’s leading source of electricity.
“Cleaner burning” is far from clean
Amid waves of science warning of our ever-decreasing window to avoid climate disaster, the industry’s most common talking point to justify more natural gas production is the myth that fracking is “bridge fuel” that can help us transition to clean energy. But it isn’t.
Replacing coal with natural gas is not an improvement. In some cases, it might be worse. The largest component of natural gas is methane, a greenhouse gas 86x more powerful than carbon dioxide. Methane is released at every step of the oil and gas process resulting in climate pollution.
Earthworks certified thermographers have made this invisible climate and health pollution visible using advanced optical gas imaging technology. Other studies have found that methane pollution is 3x more than companies admit and leaking at a rate that erases any benefits gas has over coal in the near term.
Organizations like Earthworks are focused on addressing oil and gas methane pollution because reducing methane now can slow global warming.
A fracked-gas power plant in Pearsall, Texas was supposed to be a shining example of the industry’s newest and cleanest technology available. Earthworks’ investigation there captured video showing the newest and cleanest wasn’t enough to stop extensive methane and health hazardous air pollution.
The Permian Connection
Located in West Texas/Southeast New Mexico, the Permian Basin is the largest producing oil shale in the United States. Thanks to the Consolidated Appropriations Act signed in 2015, (HR 2029) allowing for US exports of crude oil, the Permian Basin fracking industry has made the US a global competitor in the oil and gas market–second only to Russia and Saudi Arabia. This unprecedented production has created a climate methane bomb.
Peer-reviewed findings from satellite data show that the Permian has unleashed the highest emissions ever measured from a major U.S. oil and gas basin. And hauntingly, despite the COVID-caused oil price drop, this historic level of production and pollution is still predicted to increase. A pre-COVID report predicted its production to double by 2030.
J.P. Morgan stands to profit both from extracting natural gas through Permian fracking and selling these fossil fuels to consumers through gas plant electric generators.
As an example, take the Permian fracking company Diamondback Energy–a company whose extensive well site emissions have been documented by Earthworks.J.P. Morgan is the third-largest shareholder of Diamondback Energy’s, owning upwards of 15,594,568 shares. They now also own El Paso Electric Co. If built, the Newman 6 would join El Paso’s other 5 natural gas plants directly linked to the Permian Basin Via the El Paso Pipeline.
This is all by design. In fact, in 2019, while J.P Morgan was still in the process of lobbying the City of El Paso to approve the merger, the mega-bank scheduled a “Permian Bus Tour” with oil companies including Diamondback Energy, in effect scouting their climate crisis projects.
Newman 6 would increase the legitimacy of the Permian Basin as the largest producing oil shale in the US. It would make El Paso’s chances for a clean energy transition nearly impossible since it would lock in the City’s natural gas consumption for the next 20 years.
But not if we stop it first. If you are interested in participating in this campaign, please contact Earthworks [email protected].