Texas preparing to boycott ‘carbon conscious’ investors

As far back as at least King Edward I of England, people have been concerned about the environmental effects of fossil fuels. 

In Edward’s case, the nobility of England were greatly distressed about the soot in the air as a result of the peasants’ attempts to keep warm by burning coal. 

Today, most of the concern about the use of fossil fuels–coal, oil, and natural gas–is not about pollution but about putting naturally occurring carbon dioxide (CO2) back into the atmosphere from which it originally came.

The United States government has taken a light touch on this compared to many other countries. And even past efforts to reduce CO2 emissions were lessened when President Trump withdrew the U.S. from the Paris Accords to avoid the harmful economic effects of CO2 limits.

One state, Texas, has gone even farther, seeking to protect Texas’ “flourishing oil and gas industry and the millions of Texans who rely upon it” from the all out assault by those who want to decarbonize the energy sector and a move to a “net zero” world.

Last year, the Texas Legislature passed legislation that requires state agencies to stop doing business with “all financial companies that boycott energy companies,” a practice by companies typically knows as ESG investing. If a company is placed on the list of those that boycott energy companies, Texas state agencies are “required to sell, redeem, divest, or withdraw all publicly traded securities” from that company. 

As the list is being compiled, Texas Lt. Governor Dan Patrick made it plainly known that BlackRock, one of the nation’s largest investment firms, is placed “at the top of the list.”

In a letter to Texas Comptroller Glen Hegar, Patrick wrote that about his “grave concerns that BlackRock’s public statements and actions do not reflect its sentiments presented to my office.”

BlackRock recently visited with Patrick’s office to offer assurance that it is “committed to Texas and Texas’s vast energy footprint.” However, as Patrick noted, the company’s public pronouncements do not comport with its private statements designed to maintain its business ties with Texas government. 

On BlackRock’s website, it posted a letter to investments about “How to invest in the net zero transition.” The letter lets investors know not to be concerned about periods like we are currently experiencing when “traditional energy performs well.” BlackRock assures investors that the net zero transition is advancing. 

BlackRock is not alone in its effort to eliminate fossil fuels. Last year, JPMorgan Chase announced it had targeted “more than $2.5 trillion over 10 years to advance climate action and sustainable development.” Its actions are being made “with the goal of accelerating the deployment of solutions for cleaner sources of energy and facilitating the transition to a low-carbon economy.”

The problem with what BlackRock, JPMorgan Chase, and many other “carbon conscious” businesses are doing is their actions completely ignore the amazing benefits to human health and prosperity brought about by the use of fossil fuels as an energy source over the last 200 years or so.

Before fossil fuels came to widespread use, wood, human muscle, and draught animals accounted for most of the energy consumed as most of the world struggled in or near poverty. But with the introduction of fossil fuels made possible by the development of capital markets, life radically changed for humans across the globe as the use of fossil-fuel mechanical power multiplied many times over.

Kathleen Hartnet White explains how humans have benefited from modern energy:

“Life expectancy had changed little throughout all human history until the Industrial Revolution; it thereafter tripled. Income per capita has since increased 11-fold. Not coincidentally, man-made emissions of carbon dioxide have risen three-fold since the beginning of the Industrial Revolution. Fossil-fuel powered mechanization revolutionized economic productivity, increased incomes, population, and life expectancy across all classes.

Fossil fuels became the primary source of human energy because people, through markets, chose them as an affordable and reliable source of energy that would greatly benefit them. Such is not the case with the push for a transition to a low-carbon economy.

The net zero crowd is populated by the elite in business, government, academia, and the media. And companies like BlackRock and JPMorgan Chase are not responding to market signals sent by consumers. 

Instead, they are responding to pressure from the government who hold the purse strings to billions of dollars of taxpayers money being funneled to the businesses. And the companies know that if they do not go along with their government masters all that money will be in jeopardy. 

Texas politicians are listening to the grassroots. What Americans need today is more leaders in business and government who will let them choose what fuels are best for our country. Our future prosperity depends upon it. 

Bill Peacock is the policy director of The Energy Alliance