An undated image of oil drilling in the United States The Utah treasurer and auditor signed a letter in November asking US banks to avoid “boycotts” of financing for coal, oil and gas projects. (Thaiview, Shutterstock)
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SALT LAKE CITY – The Utah treasurer has said his office will conduct a “thorough due diligence assessment” of any energy contract issued by a financial institution that has pledged to “boycott” funding for traditional energy industries , such as coal, oil and gas.
Utah Treasurer Marlo Oaks’ announcement on Wednesday comes just over a week after he and Utah Auditor John Dougall were among leaders of 15 states who signed a letter open to the US banking sector, tearing apart “the ongoing and growing economic boycott” of traditional energy producing industries.
“Traditional energy plays an important role in Utah’s economy, particularly in rural Utah. Cutting funding to businesses engaged in activities economically essential to advancing a radical social agenda destroys livelihoods,” increases costs and does little to advance the desire we all have to breathe cleaner air and improve the environment, ”Oaks said in a statement Wednesday. “Punishing these entities is contrary to our nation’s capitalist system which has developed some of the greatest innovations in human history.”
The letter, dated November 22, was from West Virginia Treasurer Riley Moore, but was signed by more than a dozen other elected officials, including Oaks and Dougall. In it, elected officials wrote that any policy against industry would attack “well-paying jobs, health insurance, basic infrastructure and quality of life” and hurt state revenues.
The letter goes on to say that states will take action to support banks and lenders that do not participate in traditional energy boycotts. For some states, this will include a certification process indicating that an energy boycott was not considered in a project proposal or, as in the case of Utah, it may take the form of an assessment.
“We will each take concrete steps under our respective authority to select financial institutions that support a free market and are not engaged in harmful boycotts of the fossil fuel industry for our states’ financial service contracts.” , wrote the group. “While these measures vary in nature and scope from state to state, they will all be closely tailored to meet the compelling interests of our respective citizens.”
The letter concludes that they are not asking for “special treatment” for traditional energy sources; rather, they seek to have financial institutions rate fossil fuel companies “no harm or no preference” like any other company. Treasurers, auditors and controllers from Alabama, Arizona, Arkansas, Idaho, Kentucky, Louisiana, Missouri, Nebraska, North Dakota, South Carolina, from South Dakota, Texas and Wyoming have also signed.
The letter was in response to the US Treasury Department’s “Fossil Fuel Energy Guidance” issued to multilateral development banks in August. The Federal Ministry explained that it would begin to “advocate for MDB investments that prioritize clean energy, innovation and energy efficiency, in order to achieve a clean and sustainable future in line with their development objectives and the objectives of the Paris Agreement ”.
The department said it was enacted in response to an executive order signed by President Joe Biden a week after taking office. The message of switching to alternative fuels was also hammered out at the United Nations Climate Change Conference that ended last month.
The debate between fuel sources connects current and future businesses with current and future climate concerns.
Scientists say reducing global greenhouse gases associated with fossil fuels and climate change, such as carbon dioxide and methane, is one of the key measures to slow the rate of Earth warming. A United Nations report released in August found the earth is warming faster than originally believed, leading to more heat waves and drought, among other adverse effects.
Biden agreed at the summit to work with other countries to reduce global methane emissions by 30% over the next decade, the Associated Press reported. Stopping leaks from oil wells and pipelines is considered one of the simplest solutions to reducing methane emissions. But other harsher solutions require moving away from fossil fuels and switching to renewable sources, such as solar, wind, hydro and geothermal power.
Utah’s energy has already started to change long before new policies were put in place, according to the US Energy Information Administration’s analysis of Utah’s energy use updated in March. For example, the report says Utah’s dependence on coal for energy fell 14 percentage points between 2015 and 2020, while solar power accounted for 97% of “power generation capacity.” of Utah added since 2015.
Yet fossil fuels make up the bulk of the state’s energy. Coal accounted for about 61% of Utah’s total net electricity production in 2020, while natural gas accounted for an additional 25%. According to the report, only around 14% came from renewable energy sources.
The administration’s report also pointed out that Utah is a net supplier of electricity to neighboring states because it produces more power than it consumes. It did not include any figures on employment.
The Intergovernmental Panel on Climate Change in 2018 released a report that noted that a rapid move away from coal, oil and gas would be costly, but would help slow global warming and reduce the harmful impacts associated with it.
But Dougall sees the debate differently, in that he doesn’t want to take sides. In a statement released Wednesday, Dougall called Utah an “unprecedented energy state” as residents “expect reliable, low-cost power with a continual push for cleaner air.”
That is why he said he signed the letter to the country’s financial industry.
“The government should not pick winners and losers in the market. Banks and investors should focus on the potential of companies to provide increased value to shareholders, rather than favoring certain partisan agendas, especially at the expense of shareholders “, continues his statement. “Energy companies of all types should have unrestricted access to capital and loan markets. “