Jhe influential right-wing lobby group, the American Legislative Exchange Council (ALEC), is behind a wave of new state laws to block oil industry boycotts. The group’s strategy, which aims to protect big oil companies and other pro-conservative industries, is modeled on legislation aimed at punishing divestment from Israel.
Earlier this year, the state legislatures of West Virginia, Oklahoma and Indiana introduced a version of an ALEC-drafted law called the Energy Discrimination Elimination Act to protect big oil companies. stock sales and other actions to protest fossil fuels. the role of industry in the climate crisis. A dozen other states have publicly supported the intent of the legislation.
Texas has already started compiling a list of companies to target for refusing to do business with the oil industry after the state passed a version of the law last year. At the top of the list is the world’s largest asset manager, BlackRock.
The push to blacklist companies that boycott the oil industry follows a December meeting between politicians and ALEC, a corporate-funded organization that is drafting legislation for Republican-controlled states to pass and lead conservative causes.
At this meeting in San Diego, members of the ALEC Energy Task Force voted to promote model legislation requiring banks and financial companies to sign a pledge not to boycott oil companies in order to obtain contracts with the State. The wording closely resembles laws drafted by ALEC and passed in more than 30 states to block support for the Boycott, Divestment and Sanctions (BDS) movement against Israel’s oppression of Palestinians.
Similar laws are also promoted to protect the arms industry against boycotts.
Legislation drafted by ALEC, which has a history of extreme denial of the climate crisis, asserts that “American and European fossil fuel producers…are among the most socially and environmentally responsible companies in the world.” He complains that “corporations are boycotting fossil fuel companies by refusing to supply them with products or services,” and says massive stock sales by financial funds are hurting investors.
“Banks are increasingly withholding financing from creditworthy fossil fuel companies solely for the purpose of decarbonizing their loan portfolios and marketing their environmental credentials,” the bill says.
“This model bill proposes a strategy in which states use their collective economic purchasing power to counter the rise of politically motivated and discriminatory investment practices.”
The drive to pass the legislation follows the refusal of major financial firms to finance new oil and gas drilling in the Arctic. Banks and other financial institutions are also under pressure from environmental groups and customers to divest from fossil fuel companies. JPMorgan Chase, Citibank and Goldman Sachs are among those companies that publicly pledge to support the transition away from oil.
As with anti-BDS laws, any company with more than 10 employees would have to certify that they are not boycotting fossil fuel companies in order to do business with a state government. Public funds, such as pensions, will generally be forced to sell investments in companies that refuse to lend to the oil industry.
ALEC’s push comes after the Texas Legislature passed a version of the law in June 2021.
This legislation was backed by the Texas Public Policy Foundation, an active ALEC member funded in part by Koch Industries, which accused Wall Street firms of “colluding in a coordinated attack on Texas and our way of life.” by denying capital to oil. businesses.
TPPF, which has several members also working within ALEC and has close ties to Sen. Ted Cruz and right-wing former Texas Gov. Rick Perry, later lobbied for the law to be passed by others. States.
Jason Isaac, a former Texas state legislator who now leads TPPF’s initiative to defend the oil industry, sent a memo to attendees at the ALEC meeting in San Diego in which he criticized the banks and other “woke” financial institutions he accused of “colluding to deny loans and investments in fossil fuel companies.”
“The following model policy is based on ALEC-backed anti-BDS legislation regarding Israel and was recently passed in Texas to include discrimination against fossil fuels. Voting for this model policy and encouraging more state legislatures to adopt it will send a strong message that states will fight back against woke capitalism,” reads the memo, which was obtained by Alex Kotch of the Center for Media and Democracy.
In January, Texas Lieutenant Governor Dan Patrick asked the state Comptroller to place BlackRock, which manages about $10 billion in assets, at the top of his list of blacklisted companies because it said its commitment to work towards decarbonizing the energy sector “will destroy the oil and gas industry and destabilize the global economy”.
Patrick accused BlackRock Chairman and CEO Larry Fink and his executives of making reassuring statements privately saying the company “is committed to Texas and Texas’ vast energy footprint,” but taking a different stance in public by pledging to pressure energy companies to work towards net zero.
“Therefore, BlackRock is boycotting energy companies by basing investment decisions on a company’s commitment to meeting BlackRock’s ‘net zero’ goals,” Patrick wrote.
BlackRock, which stands to lose about $20 billion in Texas public sector pension funds, actually remains a major shareholder in oil and gas companies through index funds.
“BlackRock is not boycotting energy companies,” he said in a statement to the Guardian. “We are not pursuing divestment from oil and gas companies as a policy. We plan to continue investing in these companies and will work with them as they drive the energy transition to maximize long-term value for our customers. Our primary concern with the law is the potential negative consequences it could have on current and future Texas retirees.
The anti-BDS legislation has been the subject of criticism and legal challenges. Several states have been forced to change anti-BDS laws to restrict them to large corporations after courts ruled that requiring individuals to sign pledges not to boycott Israel infringes on free speech rights . Kansas revised its law in 2018 after a Wichita teacher filed a federal lawsuit in response to being ordered to sign a no-boycott Israel pledge in order to keep her job. The city of Dickinson, Texas dropped a similar requirement for residents seeking hurricane damage relief after an outcry.