Treasurers from 14 states warn banks against targeting energy companies

By William Patrick | The Center Square

Louisiana Treasurer John Schroder cosigned a letter with 15 other state treasurers and chief financial officers warning large banks to back off an “ongoing and growing boycott” of traditional energy companies.

If not, the coalition of mostly energy-producing states said it would take a combined $600 billion in contracts elsewhere.

“We have a compelling government interest when acting as participants in the financial services market on behalf of our respective states, to select financial institutions that are not engaged in tactics to harm the very people whose money they are handling,” the letter said. “Any financial institution that has adopted policies aimed at diminishing a large portion of our states’ revenue has a major conflict of interest against holding, maintaining, or managing those funds.”

The signatories said they are attempting to collectively protect their state economies and critical industries. Energy-rich states such as West Virginia, Texas, and North Dakota are among them, though South Carolina, Alabama, and Nebraska are also included.

According to the U.S. Energy Information Administration, Louisiana’s natural gas production and oil refining capacity make it a top energy producer in the country. The industry employs more than 250,000 people.

“The coal, oil, and natural gas industries provide well-paying jobs, health insurance, basic infrastructure, and quality of life to citizens in every state,” the letter said. “These misguided political schemes have impeded economic growth, driven up consumer costs, and regressed our country to foreign energy dependence.”

Schroder has already endorsed such tactics as chairman of the Louisiana bond commission.

The commission removed JPMorgan Chase from a $700 million gas-and-fuel tax revenue bond series last month after the banking giant failed to answer an inquiry about restricting lending services to legal firearm companies and gun purchasers – an express violation of its Louisiana underwriting agreement.

The coalition indicated it would take similar concrete steps to select financial institutions “that support a free market.”

“For example, some of the officers who have signed this letter will require a financial institution to certify, as a minimum qualification in all future Requests for Proposals (RFPs), that the institution is not engaged in a boycott of fossil fuel companies. Other officers will perform an ‘enhanced due diligence assessment’ of any potential financial services contract with an institution that has publicly pledged to boycott fossil fuel industries,” the coalition said.

Not everyone agreed with Schroder’s bond commission reasoning, however.

Matthew Block, an attorney representing Gov. John Bel Edwards, expressed concern about pressuring “nonstate actors” to comply with the commission’s stance on gun rights. The position could reflect broader concerns with respect to the much larger fossil fuel debate.

“I think we need to be very direct about what we’re doing here because … this is a road that leads us to someplace where none of us know where we’re going,” Block said.

The multi-state letter follows a series of Biden administration encroachments, the signatories said, including U.S. Treasury guidance urging large banking institutions to cease financial support for American energy development abroad.

The letter said the guidance harms the U.S. economy and likely cedes foreign fossil fuel development to Chinese interests.

The coalition also cited President Biden’s executive order banning domestic energy exploration on public lands. The so-called moratorium, enacted shortly after taking office, was a climate change measure to fulfill a campaign promise to “transition” away from oil.

“The United States and the world face a profound climate crisis. We have a narrow moment to pursue action at home and abroad in order to avoid the most catastrophic impacts of that crisis and to seize the opportunity that tackling climate change presents,” Biden’s Jan. 27 executive order read.

A lawsuit brought by Louisiana Attorney General Jeff Landry brought the moratorium to a halt. The administration’s first public land oil-and-gas lease sale occurred last month in New Orleans.

“It is our sincere hope that no financial institution will be rendered ineligible to provide banking services to our states based on the concerns described herein,” the letter concluded.