EnergyTexas Threatens to Pull Funds from Banks That Boycott Fossil Fuel Companies

A global push for banks to cease business with traditional energy companies has drawn a rebuke from 15 state finance officials.
December 1, 2021
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A group of 15 state fiscal officers, including Texas Comptroller Glenn Hegar, signed a letter to U.S. banks threatening to pull $600 billion in funds from entities that spurn fossil fuel industry financing.

“At a time when countries around the world are experiencing energy supply constraints that will worsen the inflation crisis and threaten our economic recovery, this administration is using every tool at its disposal to try to curtail traditional sources of domestic energy production,” Hegar said in a statement to The Texan.

“I am proud to join my fellow fiscal officers in these energy producing states to defend our state economies against these efforts.”

There is a burgeoning movement to push large banks to cease financing for coal, natural gas, oil, and other fossil fuel producers. It comes alongside a broader push for any and all large institutions to divest fully from fossil fuels — this is especially prominent on America’s university campuses.

“[T]he overarching objective of our actions … [is] to protect our states’ economies, jobs, and energy independence from these unwarranted attacks on our critical industries,” reads the letter.

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West Virginia Treasurer Riley Moore is the leading signatory on the letter, first reported by The Federalist. In addition to Texas and West Virginia, the states that signed the letter are Alabama, Arizona, Arkansas, Kentucky, Idaho, Louisiana, Missouri, Nebraska, North Dakota, South Carolina, South Dakota, Utah, and Wyoming.

The letter adds that each state will take its own steps to follow through on the collective threat but stops short of any specifics.

Texas accounts for both the biggest slice of that $600 billion pie and the country’s largest output of oil and natural gas.

The letter adds, “While we understand that you may be under tremendous undue pressure from the Biden Administration, we are simply asking financial institutions to award financing based on an unbiased, non-political basis.”

Since taking office, Joe Biden has issued various policies aimed at curtailing the fossil fuel industry — such as torpedoing the Keystone XL pipeline and banning new drilling on federal lands.

Moore told The Federalist that he expects more GOP-led states to join the coalition.

Texas has already taken some action on this issue. Senate Bill (SB) 13 from the 87th regular session prohibits state agencies from using financial institutions that boycott energy companies. For those companies to receive Texas’ business, it requires written verification from the entity that they do not engage in such boycotts.

Similarly, this year the legislature prohibited municipalities from outlawing natural gas within their jurisdiction. Most famously, this was done by the City of Berkeley as an effort to reduce its use of fossil fuels. The fight over state resources between environmentalists and traditional energy resources has been brooding for quite some time.

“Unlike the Biden administration, Texas will fight to support the jobs and businesses in the oil and gas industry and work to ensure our country has the domestic fuel supplies necessary to meet our energy needs,” Hegar added. “We know that energy is not a binary choice. Texas has proven that renewable energy sources and fossil fuel based production can and must coexist to meet the needs of a growing and dynamic economy.”

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Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.