Biden’s climate alarmist nominees send a chilling message to financial institutions, the energy industry
“Financial regulators must reimagine their own role so that they can play their part in the broader reimagining of the economy.”
“…adoption of [financial regulatory] practices and policies that will allocate capital and align portfolios toward sustainable investments that do not depend on carbon and fossil fuels.”
“It’s going to change allocation of capital. Suddenly people are going to be making evaluations considering long-term risk to the investment based on the climate crisis.”
These are all quotes from President Biden’s current and former high-level nominees and appointees. Their statements are not made in a vacuum and the signals they send are every bit as much to blame for the energy inflation we are seeing today as they are representative of the administration’s hostility towards fossil fuels. This anti-energy rhetoric has had a chilling effect on markets and long-term investments, decapitalizing the recently booming American oil and gas industry. In an effort to placate their liberal base, the Biden administration has promulgated policies and broadcasted messages that pick and choose favored vs disfavored industries.
Unfortunately, banks and financial institutions have followed suit, placating activist investors by blackballing energy producers, firearms, and other legal industries by restricting their access to credit and capital. Consequently, producers in the Bakken in my home state of North Dakota have been left cash-starved and now produce 400,000 barrels a day less than at its peak. Similarly, carbon capture projects have struggled with financing because administration and financial leaders have focused on fuel types rather than the goal of reducing emissions.
This politically motivated discrimination is why I introduced the Fair Access to Banking Act. This legislation, which is co-sponsored by one-third of the Senate, protects access to financial services and ensures banks base their decisions on impartial, individualized risk-based analysis developed through empirical data and evaluated under quantifiable standards.
The Biden administration is planning to double down on its agenda of regulatory overreach. On March 21, the Securities and Exchange Commission (SEC) will announce its rule governing how publicly traded companies are required to disclose their risks from climate change. Not only does the SEC not have the authority to require disclosures that are not financially material, the new climate reporting requirements are arbitrary, confusing, and would impose significant costs on publicly traded companies.
The regulatory assault and sharp rhetoric from the Biden administration comes against a backdrop of skyrocketing energy prices. While President Biden made the right decision to ban energy imports from Russia after bipartisan pressure from Congress, this action in itself is not enough. The administration is reportedly turning to despots in Iran and Venezuela to help meet oil shortages. Instead, it should be sending market signals to U.S. energy producers who want to step in, fill the void, and help America’s European allies become less dependent on the energy supply of dictators. Jen Psaki likes to talk about price gouging and supposed deferred action from oil and gas producers. In reality, many producers and refiners are ready and willing to step up, but no sane CEO would spend millions or billions in costly capital expenditures when their government actively touts an energy transition to regulate or decapitalize out of existence.
The Biden administration needs to dramatically change course by reversing bureaucratic efforts to deny financing to what they wrongly deem “socially suboptimal” industries. It starts by withdrawing radical, climate alarmist nominees and political appointments. These signals could provide banks, financial institutions, and energy producers the security and stability to unleash long-term American energy growth.
Cramer is the junior senator from North Dakota.