In a move designed to push back against the environmental, social, and governance (ESG) policies of big financial institutions, Oklahoma has adopted legislation that will require the Sooner State to divest from any financial company that boycotts the fossil fuel industry.
The Energy Discrimination Elimination Act of 2022 (House Bill 2034) requires the state treasurer to maintain and provide to each state governmental entity a list of financial companies that boycott energy companies. The state governmental entity must then notify the treasurer of the listed financial companies in which they own direct or indirect holdings. They must also send a written notice to the financial institution, warning that it may become subject of divestment.
Under the new law, a state governmental entity must rid itself of at least 50% of the assets of a listed financial institution within 180 days of the financial company’s receiving notice and 100% of the assets within 360 days.
“Free of Discrimination”
“Oil and gas are the backbone of our state’s economy, and it’s crucial that we do all in our power to fully support this industry,” Sen. Mark Allen (R-Spiro) told KFOR. “I’m happy to have carried this measure that will make our state free of discrimination against the fossil fuel industry, and am glad my colleagues see the importance oi standing up against the corporations that put political ideology ahead of the interests of our taxpayers, shareholders, and residents.”
“Oklahoma is the state that fossil fuels built. If you are boycotting them (fossil fuel companies), the state will not do business with you,” added Sen. Mark McBride (R-Moore).
Oklahoma’s new law is modeled on a similar statute, State Bill 13, adopted earlier in Texas. Both states see their livelihoods and tax bases endangered by ESG.
Financial institutions that adopt ESG policies do so with the goal of denying capital to oil and natural gas producers, thereby benefitting renewable energy companies, in which many are invested. Once capital has dried up, ESG proponents hope, fossil-fuel companies will be gradually driven from the marketplace. ESG is being actively supported by the Biden administration, which sees it–along with denying drilling permits on federal lands and offshore and blocking construction of oil and gas pipelines–as a way to clear the path for renewable energy, primarily wind and solar power.
Rough Sailing Ahead
The push for ESG-inspired divesting from fossil-fuel companies, with accompanying calls to “keep it in the ground,” come at a time of soaring energy prices and concerns that some areas of the country will be facing blackouts and brownouts this summer, as the nation’s shaky electric grid shows the effects of trying to cope with increased reliance on intermittent wind and solar power. While grid operators warn about blackouts, the East Coast of the U.S. is facing an acute shortage of–already expensive–diesel fuel. Diesel is used in every segment of industrial activity and the supply chain, from the transportation of goods to manufacturing and agriculture, powering such things as trucks, tractors, locomotives for freight trains, and heavy equipment at construction sites.
Motorists and businesses are already feeling the pinch. National average diesel retail prices rose to an all-time high for the 15th straight day on May 13th, reaching $5.56 a gallon, according to AAA, the Wall Street Journal reported. They have surged 56% in 2022, outstripping rises in the benchmark price for crude oil. Retail unleaded gasoline prices have risen 35% to a national average of $4.43 a gallon.
Diesel is the workhorse of industry and can’t be replaced by windmills, solar panels, or batteries.
But don’t tell that to anyone in the Biden administration; they don’t want to hear it.