Guest opinion: Fossil fuels are a bad investment, and our representatives need to take notice
When it comes to our investments, it’s time that we, and our elected officials, look to the future.
Of all the priorities that must be on Rep. Rob Bishop’s list during the midst of this pandemic — getting help for Utah businesses, making sure working families are getting their relief checks, increasing the number of COVID-19 tests available — I would have thought that threatening major U.S. banks over their investment decisions would have been at the bottom.
But then I read the letter that Bishop and three dozen other Republican lawmakers sent late last week to President Donald Trump and six of the nation’s largest banks. In the letter, Bishop and his colleagues complain about the Wall Street banks “discriminating” against the oil and gas industry because of their refusal to finance companies that are pursuing drilling in the Arctic.
“We write with critical concern as major American financial institutions continue unfairly to pick energy winners and losers in order to placate the environmental fringe,” the group wrote. They go on to describe the many supposed virtues of coal, oil and gas companies, although they fail to mention the most relevant bit of information: the industry is one of the largest donors to the Republican party.
The letter ends: “We urge you and your Administration to use every administrative and regulatory tool at your disposal to prevent America’s financial institutions from discriminating against America’s energy sector while they simultaneously enjoy the benefits of federal government programs.”
For a party that has long glorified the virtues of the free market and railed against the creeping threat of socialism, the letter is a remarkable act of hypocrisy. What exactly is the argument that Bishop and his colleagues are making? That the federal government should be instructing banks where and how they make their investments? Even Sen. Bernie Sanders never went so far as to say the federal government would dictate by fiat how banks do their business.
The reason major U.S. banks like Goldman Sachs, Wells Fargo, Citigroup and JPMorgan Chase have backed away from lending to coal companies, tar sands projects and Arctic drilling isn’t because they’re bending a knee to radical environmentalists. I should know: I help coordinate a coalition of over 100 organizations called Stop the Money Pipeline that is working to end the financing of fossil fuels.
Our campaigns are succeeding not because we’re “scaring” the banks (although I’m sure the threat of protests helps), but because we’ve shined a spotlight on a basic economic reality that Bishop and his colleagues don’t seem to understand: Fossil fuels are a bad investment.
Banks make their decisions based on risk and it doesn’t take more than a quick glance at the fossil fuel sector to realize that investing in oil and gas companies right now is about as safe as jumping out of an airplane without a parachute. None other than Warren Buffett said recently that he regretted his decision to maintain his investments in oil and gas companies. Over at MSNBC, uber-capitalist Jim Cramer has described fossil fuel companies as being in their “death knell” phase. As the Washington Post wrote over the weekend, even the Rockefellers have gotten their investments out of oil and gas — and it’s only improved their returns.
If anything, the big Wall Street banks should be going even further. Coal, tar sands and Arctic drilling are the most egregious examples of risky fossil fuel plays, but no investment in the industry should be considered safe. The writing is on the wall: Oil and gas companies have taken on massive debts, the sector is in turmoil and it looks as if demand is in a permanent decline — not just because of the coronavirus pandemic, but because of the great advances in efficiency and renewables.
Which brings us back to Bishop. Looking at the market, does he really think that the best way to create a thriving economic future for Utah is investing in oil, gas and coal?
“When it comes to our investments, and those of major U.S. banks, it’s time that we, and our elected officials, look to the future.” — Jamie Henn
According to the U.S. Energy and Employment Report, in 2018, nearly three times as many Utahns worked in energy efficiency, solar and wind (38,634) as in fossil fuel mining, fuel production, or energy generation (13,326). That trend is only going to grow. Case in point: On Monday, the utilities group PacifiCorp announced a huge solicitation for new energy storage and renewables projects in the Mountain West, which could mean a boom here in Utah. There’s nothing remotely comparable being proposed by fossil fuel companies.
We owe workers in the fossil fuel industry a tremendous debt of gratitude. Despite the environmental and climate damage caused by many of their companies, these energy workers helped build our economy and power our state for decades. They deserve direct support during this crisis and ongoing assistance to make the transition into jobs in the clean energy sector or other industries. But when it comes to our investments, and those of major U.S. banks, it’s time that we, and our elected officials, look to the future.
Jamie Henn is the co-founder of 350.org, a coordinator of the Stop the Money Pipeline campaign and a board member of O2 Utah.