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Texas’ Anti-Business, Pro-Fossil Fuel Law Is Spreading

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Photo: Eric Gay (AP)

The Texas law that seeks to stop companies from being mean to fossil fuels is getting popular—even if its execution and implications are still murky. States across the country are looking at adopting similar bills to one passed in Texas that forbids the state from doing business with any institutions that “boycott” fossil fuels.

The original bill was passed last year, but its enforcement mechanisms are just now coming into play. The bill instructs the Texas comptroller to create a list of businesses that “boycott” fossil fuels. It’s unclear what exactly qualifies a “boycott” or how the state plans on cutting ties with financial institutions, banks, and other companies it deems aren’t being nice enough to Big Oil. The bill was modeled after a separate bill that banned the state from doing business with any entity that did not support Israel; that law has been blocked by judges twice since its passage in 2017.

Despite these lingering questions, other states are following Texas’ lead. Last month, Oklahoma’s governor signed its own version of the bill, called the Energy Discrimination Elimination Act, into law. In a local news report, supporters of the bill cited Texas’ “success” in implementing anti-anti-fossil fuel regulation, claiming that that state hasn’t seen any higher costs as a result of passing its law. (Again, it’s important to note that Texas hasn’t actually taken any actions yet against companies that it has decided are being unfair to fossil fuel companies, so the true implications of laws like these have yet to be seen.)

“Oklahoma is the state that fossil fuels built,” State Rep. Mark McBride (R) told KFOR News. “If you are boycotting them, the state is not going to do business with you.”

Elsewhere in the country, lawmakers in other oil and gas states are also eyeing the Texas law as a model. West Virginia passed a bill earlier this year that would restrict the state from working with banks that “have been shown to refuse, terminate or limit commercial activity with coal, oil or natural gas companies.” Meanwhile, a similar bill introduced this year in Indiana would prohibit the state from making investments in companies that “boycott energy companies.” And a bill working its way through the Louisiana House would establish the state as a “fossil fuel sanctuary” and forbid enacting certain policies that would specifically tax or financially hamper the industry.

Many of the lawmakers that have introduced legislation have ties to the American Legislative Exchange Council, or ALEC, a powerful network of conservative politicians with links to fossil-fueled dark money organizations like the Koch Brothers. ALEC, which helps seed template conservative bills to state lawmakers, appeared to be discussing a template bill based on the Texas legislation in an email leaked late last year, but the organization recently denied approving a model bill. (States seem to be doing just fine writing similar legislation on their own.)

Ever the trailblazer, Texas is continuing to forge ahead with the law—even as its real-world implications remain unclear. In March and April, Comptroller Glenn Hegar sent letters to nearly 150 financial companies, investment firms, and banks to interrogate them on this front, and he’s starting to get responses. Big-name financial players, including BlackRock and JPMorgan Chase, have responded assuring Texas that they still play nicely with fossil fuel companies, despite their public moves on climate activism.

BlackRock has served as a financial bogeyman of sorts for the right recently, becoming a figurehead in conservative efforts to fight against “woke capitalism.” But the tiny moves the financial giant has made on climate, many of them made in talking points by CEO Larry Fink, are hilariously inadequate for the kind of bigger-picture shift the right is supposedly afraid will happen; BlackRock, after all, still funds billions in fossil fuel projects. Some recent charges include $1 trillion in coal projects around the world, $2 billion in oil extraction in the Amazon rainforest, and a $15.5 billion pipeline deal with Saudi Aramco.

Just because a CEO like Fink talks a big game on climate doesn’t mean that a firm is actually putting its money where its mouth is. If a half-baked policy from a state that hampers its own grid and puts its residents in jeopardy in its effort to boost up fossil fuels is all it takes for an enormous bank to crumble, they were never climate crusaders to begin with.

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2022-06-02 07:00:00

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