Texas plans to punish companies that stray from fossil fuels

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An oil rig and pump jack in Midland, Texas.

An oil rig and pump jack in Midland, Texas.
Photo: Jacob Ford/American Odessa (PA)

Attention, financial companies. If you’re mean to fossil fuel companies, Texas is coming for you.

Bloomberg reported this week that the Texas state comptroller begins doubling down on its requirements for financial companies to provide the state with more details about their climate policies, in accordance with a law passed last June that prohibits the state from doing business with companies that “boycott energy companies”. Comptroller Glenn Hegar sent letters to nearly 150 financial firms, ranging from large private equity firms to small investors, about their climate plans this week. The move follows initial requests Hegar sent to 19 companiesincluding BlackRock and JPMorgan Chase, last month.

“We know that some of these companies have investments in oil and gas today, but what about the future?” Hegar said in a statement on the letters he sent last month. “Are they selling hope for a ‘green’ future by promising to divest or reduce their exposure to fossil fuels? Great questions, Glenn! Glad you’re on this important case.

The law gives the state comptroller broad discretion to assemble a list of companies and allows the comptroller to decide which companies to actually contact – and, as Bloomberg reports, it appears Hegar is launching a very wide network with the types of companies and financial firms he chooses to target. The letter states that if these companies do not respond within 61 days, it will “result in the presumption under Texas law that your company is boycotting energy companies.”

In the press release, Hegar talks about the conflict in Ukraine and “the increase in energy prices resulting from artificial efforts to reduce national energy production” (not true, but agree ), but the root of this policy began long before the invasion.. The law was offered for the first time in February 2021 and is actually based on a similar (and controversial) law prohibiting the state from doing business with entities that support the Boycott, Divestment, Sanctions, or BDS movement, for Palestine. Energy companies, Texas Lt. Governor Dan Patrick said last February, “are treated a bit like the State of Israel… That’s what’s happening in the oil and gas industry.”

This legislation actually fits neatly into a larger set of forays into the right to co-opt the language of social justice movements to defend the dirty energy of big bad banks seeking to divest. In 2020, when the oil and gas industry was in a panic over falling prices during the pandemic, Republican members of Congress sent a letter to the trump administration ask for it help stop “financial institutions to discriminate against the US energy sector.” Then-Secretary of Energy Dan Brouillette likened the banks’ divestment from Arctic drilling to “redliningthe racist banking practice where banks historically did not lend money to communities of color.

Polluting industries like natural gas producers and dairy farmers also recently complained publicly about being “cancelled”. And it seems the backers behind Big Oil are pretty excited about this line of rhetoric: In December, emails revealed that the American Legislative Exchange Council created a copycat model of Texas law that other states could replicate in order to “fight against woke capitalism.”

But even when the big bankthe promise they become greenerthey are continues to fund billions of dollars in fossil fuel projects around the world. And some of those banks appear to be willing to reassure state regulators of their fossil fuel commitments privately. Climate-denying emails from Texas’ top oil and gas regulator published in March suggests that BlackRock executives reassured him of his commitment to the industry during a meeting in January. Meanwhile, climate resolutions presented to shareholders of Citigroup, Wells Fargo, Bank of America and Goldman Sachs this week failed spectacularly. If I’m being honest, I don’t know if the Texas Controller actually has so much to worry about.

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