Oil and gas exploration auctions in the Democratic Republic of the Congo have been virulently opposed by environmentalists and Hollywood A-listers alike, but one potential solution just might help everyone see the rainforest for the trees.
The Democratic Republic of Congo is opening oil and gas licensing auctions up to crypto and carbon firms that would keep fossil fuels in the ground and sell coveted carbon credits instead.
DiCaprio, Gorillas, and Adam Neumann Collide
The DRC, a country of 92 million, is not a major producer, churning out a mere 25,000 barrels of crude oil per day (Saudi Arabia produces nine million, by comparison). But the government has long aspired to open up hydrocarbon exploration in the DRC’s vast interior — and pocket the revenues that could come with it. Last month, 27 blocks of territory were put up for an oil exploration auction, with two of them overlapping Virunga National Park, home to some of the world’s last mountain gorillas, and the Cuvette Central, the world’s largest peatland.
That move has revitalized ecological concerns that have previously stalled exploration. “A few years ago people shoved their noses into this, we saw actors like Ben Affleck and Leonardo di Caprio get on their high horse and ask for the project to come to a halt,” Didier Budimbud, the DRC’s outspoken hydrocarbons minister, told the Financial Times. “This time we will not stop.” Opening up the auction process is one potential solution, but there are cash concerns all around:
- Two major oil and gas developers with a presence in Africa, France’s and Italy’s Eni, told the FT that they’re sitting out the auction. Major financiers including JPMorgan Chase, Citigroup, Wells Fargo, and Morgan Stanley declined to finance the East Africa Crude oil pipeline in neighboring Uganda, a sign of increasing aversion to projects with high carbon footprints.
- Flowcarbon, a startup hoping to convert carbon credits into crypto assets, has expressed interest in bidding to stop exploration and offer carbon credits on the land instead — so has a coalition of carbon companies represented by venture capitalist Thomas Annicq. Flowcarbon, co-founded by WeWork’s Adam Neumann, is partnering with environmental group RedemptionDAO, to buy at least one block with support from an oil company — the group is also trying crowdfunding, though it has raised less than $3 million of its $50 million goal.
“We’re not doing this to destroy the rainforest, we’re doing it for economic gain,” Budimbud added. “With or without oil, what’s important is that we earn.”
Where’d You Get All That Green? Less clear is how carbon firms will compete. “I can’t imagine a traditional carbon credit developer raising the funds to be able to bid,” Ben Rattenbury of carbon credit rating start-up Sylvera told the FT, adding buying land or exploration could be a “catastrophic cash flow problem” for a carbon credit firm. Guess they’ll have to choose between an environmental catastrophe or a financial one.