It's 5.30pm on Monday, and as the crowds in the massive turbine hall at the Tate Modern thin out, a neat young man with slicked back hair quietly disrobes, revealing a white suit. Eight others approach him, donning green costumes. No one bats an eyelid – until the man starts singing a gospel song.

What few people at the Tate know is that is the Reverend Billy and his Earthalujah gospel choir. They are in London to exorcise the "evil spirit" of BP from the Tate, one of the main sponsors of the art gallery. Billy is a part-theatre, part-evangelical Christian, part-US performance artist. He founded the church of Earthallujah following BP's spill in the Gulf of Mexico last year after years of using fundamentalism to parody US consumerism.

He's a cross between Elvis and preacher Billy Graham, and soon the Tate balconies are full, and a crowd of 50 is on its knees around him, spontaneously raising their their hands, holding each other, whooping, singing and amen-ing. Bottles of thick black oil are poured over Billy, he smears himself across a BP logo and whips himself and his congregation into a frenzy of irony.

Ten minutes later, with a few policemen and Tate flunkies squirming at yet another art performance mounted against the continuing sponsorship of the arts by the oil company, Billy leads his new congregation outside. He could probably dunk them in the Thames, so willing are they to follow him, but instead he rails on the lawn against corporate exploiters and polluters, consigning them to the "lake of hellfire".

BP uses art sponsorship, he says, to give it a social licence to operate. The groups Liberate Tate, UK Tar Sands Network, London Rising Tide, Art Not Oil and Climate Rush, who together brought the Rev Billy to the Tate, say BP uses the "fair face of the arts to mask the stench of its true nature".

Judging from the crowds applauding his similar performances in Liverpool, Holland and at festivals in Britain over the last few weeks, the art establishment is losing the war against the growing movement by activists. In the last year, black balloons filled with oil have been released in the Tate, there have been impromptu performances at the National Theatre, Trafalgar Square and elsewhere. What to BP, Shell and the art establishment was, to begin with a mild irritant, is in danger of becoming an open wound. Lord Coe has said that the Gulf of Mexico oil spill will not harm BP's sponsorship of the 2012 Games but in these febrile times, that may be be in doubt.

For Billy, a child of Dutch calvinists who says he is "in full flight from fundamentalism", corporate commercialism is the real devil, and the line between art and irony, and religion and belief in nature is fine. Environmentalism may be widely accused by the right wing of becoming a religion yet it is the American, God-fearing right which mostly denies climate change.

"We are a post-religious church. We hold 'services' wherever we can, in concert halls, theatres, churches, and community centres," says Billy. "People who dress like me are the ones causing climate change. They are the homophobic supporters of war. In the US they get angry [with me]. They make comparisons between me and the devil. But people raised on irony have a challenge too. We marry people, baptise people, and are present at funerals. After 9/11 the parody went away. We want now to hold hands and pray?

"We are all in full flight from fundamentalism. The corporate culture is truly the heaviest, the most fundamentalist in the US. Its more serious than the church in the 14th century."