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States Threaten to Cut Funds from Banks Boycotting Fossil Fuel Companies

National

Oil derrick and oil refinery in West Texas. | Image from dszc

Fifteen state fiscal officers, including Texas Comptroller Glenn Hegar, recently signed a letter and sent it to US banks threatening the withdrawal of $600 billion in funds from organizations rejecting 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 declared in a statement he sent 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.”

Throughout the United States, there is a growing movement to pressure large financial institutions to stop providing financial aid to coal, natural gas, oil, and other producers of fossil fuels.

“[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,” the letter stated.

According to Brad Johnson of The Texan, West Virginia Treasurer Riley Moore is the letter’s principal signatory.

In addition to Texas and West Virginia, The Federalist reported that chief financial officers from Alabama, Arizona, Arkansas, Kentucky, Idaho, Louisiana, Missouri, Nebraska, North Dakota, South Carolina, South Dakota, Utah, and Wyoming also signed the letter.

The letter emphasized that each state will take its own policy steps to address the problem but did not provide specifics.

Of that $600 billion in funds, Texas has the most that it can withdraw from and is the largest oil and natural gas producer in the US.

The letter continued, “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.”

Under the Biden administration, the federal government shelved the Keystone XL pipeline project and prohibited new drilling on federal lands.

Texas addressed the issue of natural gas policy by passing Senate Bill (SB) 13 during the 87th regular session. This bill bars state agencies from using financial entities divesting from energy companies.

For those companies to receive contracts from the Texas state government, they must possess written verification showing that they do not participate in boycotts against non-renewable energy companies.

In the 2021 legislative session, the Texas state legislature banned municipalities from prohibiting natural gas drilling within their respective jurisdictions.

“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 continued. “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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