Mar. 4—Environmentalist groups are pressuring banks and insurance companies not to finance or insure oil and natural gas company projects and they have done some damage.
The Permian Basin Petroleum, Texas Independent Producers & Royalty Owners and Texas Oil & Gas associations say the battle has been joined and the outcome is uncertain.
"Those opposed to the oil and gas industry have utilized a number of different weapons to try and harm the industry," PBPA President Ben Shepherd said. "Included in this arsenal have been a variety of attempts to increase the costs of oil and gas operations.
"The end game here appears to be to make other energy sources economically competitive, not by decreasing the real world costs of those energy sources, which to be fair has also been attempted through government subsidies, but by increasing the cost of oil and gas energy development."
Shepherd said regulatory burdens have traditionally been the preferred tool to manipulate the free market and increase the costs on energy operations, but there have also been attempts to increase costs by limiting access to capital or insurance.
In 2021, he said, the Texas Senate's Bill 13 from Austin prohibited the state from investing in entities that boycott energy companies.
"The Texas Comptroller was required to conduct a study of environmental, social and governance policies and compile a list of those prohibited entities," he said. "This law has begun to have an effect on financial institutions that have previously placed investment barriers on energy companies, causing some institutions to reject their previous positions and begin lending again."
TIPRO President Ed Longanecker said pressuring financial institutions to reject oil and gas projects "is yet another tactic used by activist organizations that has no true basis in reality.
"Many of these organizations exist solely to protest fossil fuels, offer no realistic solutions to replace this critical energy source and ignore the immense damage these directives would cause including shifting market share to countries that lack the same environmental standards as the U.S.," Longanecker said from Austin.
"The pendulum is shifting as economics, energy security, policy and common sense are starting to prevail over these biased initiatives, but those efforts will undoubtedly persist in one way or another."
He said state legislators "are having a direct impact" with their legislation directing the state to divest from entities that boycott fossil fuels and following through with strict implementation and monitoring by Comptroller Glenn Hegar.