Mr. Kerry’s efforts have not gone unnoticed. In April, members of the Senate Banking Committee sent him a letter expressing concern that he had “pressured banks to make extra-legal commitments regarding energy-related lending and investment activities” which would result in “higher energy costs for US consumers”.

In May, 15 state treasurers sent a letter to Mr. Kerry saying that he and other members of the Biden administration “are privately lobbying U.S. banks and financial institutions to refuse to lend or to invest in coal, oil and natural gas companies, as part of a flawed strategy to eliminate the fossil fuel industry in our country. They urged banks and financial institutions “not to give in to pressure from the Biden administration.”

It will take more than letters to stop the Biden administration’s war on fossil fuels. In response to the Dallas Fed’s third-quarter energy survey, an oil and gas producer identified “credit expansion” as a major obstacle as “central banks continue to seek to cut their commitments to oil and gas borrowers “.

On November 22, another group of 16 state financial officers signed a open letter to the US banking sector with bite. The letter says the signatories will take “concrete steps” 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.” If these officials follow through, non-compliant banks would lose lucrative government contracts. According to the letter, these officials are responsible for a combined total of more than $ 600 billion in assets.

Texas went further in June, enacting a law prohibiting state investment in companies that boycott oil and gas companies and another law that blocks state investment in companies that restrict doing business with the gun industry. Since the laws came into effect, two of Wall Street’s largest municipal bondholders – Bank of America and JPMorgan Chase – have not managed a single sale of municipal bonds in Texas, the country’s second-largest debt issuer. States and local governments with some $ 58. billion sold last year.

The anti-boycott approach is a good start, but it fails to cope with a significant threat. Under Texas law, state agencies can still do business with financial companies such as BlackRock,

Vanguard and State Street who advocate transforming our economy to net zero carbon emissions by 2050 because they own, rather than boycott, the stocks of oil companies.

It is a problem. Exxon Mobil is Texas’ largest energy company. Climate activist hedge fund Engine No. 1 recently waged a proxy war to place insurgent directors on Exxon’s board. Reuters described it as “the first major shareholder contest to make climate change the main issue for the selection of directors.” Engine No. 1 won the backing of BlackRock, Vanguard and State Street Global Advisors, who voted their combined 21% of Exxon shares in favor of two insurgent directors who were elected to Exxon’s board. BlackRock supported a third insurgent who was also elected.

The Texas Employee Retirement System and the Texas Teacher Retirement System also voted in favor of the three insurgent director candidates and a shareholder proposal demanding a report on climate lobbying for companies aligned with the Paris agreement, which was adopted.

The No.1 engine’s proxy fight was to change Exxon’s business model away from oil and gas production. In October, Exxon’s board debated whether to continue certain major projects despite the global oil shortage and rising prices.

A more comprehensive state legislative solution might have produced a different result. The Texas law could have included a provision placing the voting rights for shares purchased by Texan entities, or the financial advisers employed by those entities, under a committee comprised of people accountable to Texan voters, rather than activists in the Texas. climate change.

The Biden administration will continue its relentless war on U.S. oil and gas producers for at least the next three years. Unless it meets resistance, prices will rise and the US energy industry will continue to contract. While state legislatures can’t stop Biden from continuing his agenda, they can discourage the financial sector and institutional investors from backing him.

Mr. Puzder is a former CEO of CKE Restaurants, President of 2ndVote Value Investments, Inc. and a guest member of the Heritage Foundation.