Off the Kuff Rotating Header Image

August 29th, 2022:

The Lege sure thinks a lot of companies need to be coddled

It’s kind of amazing, actually.

Texas banned 10 financial firms from doing business with the state after Comptroller Glenn Hegar said Wednesday that they did not support the oil and gas industry.

Hegar, a Republican running for reelection in November, banned BlackRock Inc., and other banks and investment firms — as well as some investment funds within large banks such as Goldman Sachs and JP Morgan — from entering into most contracts with state and local entities after Hegar’s office said the firms “boycott” the fossil fuel sector.

Hegar sent inquiries to hundreds of financial companies earlier this year requesting information about whether they were avoiding investments in the oil and gas industry in favor of renewable energy companies. The survey was a result of a new Texas law that went into effect in September and prohibits most state agencies, as well as local governments, from contracting with firms that have cut ties with carbon-emitting energy companies.

State pension funds and local governments issuing municipal bonds will have to divest from the companies on the list, though there are some exemptions, Hegar said.

“The environmental, social and corporate governance (ESG) movement has produced an opaque and perverse system in which some financial companies no longer make decisions in the best interest of their shareholders or their clients, but instead use their financial clout to push a social and political agenda shrouded in secrecy,” Hegar said in a written statement on Wednesday.

New York-based BlackRock, which has publicly embraced investing more in renewable energy, criticized Hegar’s decision.

“This is not a fact-based judgment,” a spokesperson for the company said in a written statement. “BlackRock does not boycott fossil fuels — investing over $100 billion in Texas energy companies on behalf of our clients proves that.

“Elected and appointed public officials have a duty to act in the best interests of the people they serve,” the spokesperson added. “Politicizing state pension funds, restricting access to investments, and impacting the financial returns of retirees, is not consistent with that duty.”

The other nine companies banned completely are: BNP Paribas SA, a French international banking group; Swiss-based Credit Suisse Group AG and UBS Group AG; Danske Bank A/S, a Danish multinational banking and financial services corporation; London-based Jupiter Fund Management PLC, a fund management group; Nordea Bank ABP, a European financial services group based in Finland; Schroders PLC, a British multinational asset management company; and Swedish banks Svenska Handelsbanken AB and Swedbank AB.

[…]

Texas energy experts said the intent of the law, and Wednesday’s announcement, was to punish financial firms that don’t want to invest in the backbone of Texas’ economy — oil and gas.

“But at the end of the day, it’s all about a rate of return,” said Ed Hirs, an energy economist at the University of Houston. “Quite honestly, fossil fuel companies, in particular oil and gas companies, have not been great performers in the (stock market) prior to this year.”

The Lone Star Chapter of the environmental group Sierra Club said Hegar’s “climate-denying publicity stunt will be costly for taxpayers.”

​​“Major financial institutions like the ones on this list are beginning to recognize that investments in fossil fuels bring significant risk in the face of an inevitable clean energy transition, and that addressing the financial risks of the climate crisis is essential to good business,” said Sierra Club Fossil-Free Finance Campaign Manager Ben Cushing. “The fact that the Texas Comptroller has arbitrarily picked a handful of companies that, despite their climate commitments, continue to have massive fossil fuel investments, shows that this is nothing more than a political stunt at Texas taxpayers’ expense.”

We’ve already determined that Comptroller Hegar is math-challenged, so this shouldn’t come as a surprise. We’ve also seen the Lege make similar laws to protect gun manufacturers and the country of Israel, about which more in a minute. I suppose one could make a protectionist case for this kind of legislative cherry-picking, and as someone old enough to remember the efforts to divest from South Africa in order to pressure it to abandon apartheid, there is certainly a moral case for this kind of law, if not for these specific ones. But if you’re going to go that route, you need to be clear about what you’re aiming at.

The firms on Hegar’s list are BlackRock, UBS Group, BNP Paribas, Credit Suisse Group, Danske Bank, Jupiter Fund Management, Nordea Bank, Schroders, Svenska Handelsbanken, Swedbank, and UBS Group.

Of the six firms that responded to the Houston Chronicle’s inquiries by press time, four deny that they are “boycotting” the oil and gas industry, even if they admittedly have some investments that reflect the growing influence of — and consumer and investor interest in — the environmental, social and governance (ESG) movement.

“As we noted in our response to the Texas Comptroller, Credit Suisse is not boycotting the energy sector as the bank has ongoing partnerships and strong client relationships in the energy sector,” said a spokesperson for Credit Suisse, based in Zurich. Spokespeople for BlackRock, UBS Group, and Schroders made similar points in disputing the comptroller’s “boycotting” label.

[…]

This is a different approach than the one taken by BlackRock, for example, which had $287 billion in assets invested in energy companies globally as of June, $108 billion of which is invested in Texas energy companies, a spokesperson said.

There are “many similarities” between BlackRock’s approach to investing in the fossil fuel industry and that of other major firms, such as JP Morgan, didn’t make the list, said Andrew Poreda, senior vice president and senior ESG Research Analyst at Sage Advisory Services, an investment firm based in Austin.

A “frequently asked questions” document prepared by Hegar’s office, raises questions itself about the state’s methodology, Poreda said. For example, the comptroller’s initial criteria included whether a firm had made public pledges to the Net Zero Banking Alliance or Net Zero Asset Managers Initiative, which call for net-zero greenhouse gas emissions by 2050, nearly three decades from now.

That’s not exactly radical territory. Oil and gas companies are openly talking about plans for the energy transition — including getting to net-zero emissions.

“Envisioning a different world in three decades hardly classifies as a boycott, and at this point is so far away that it is largely aspirational,” Poreda argues.

It doesn’t have to make sense, it just has to make the base think they’re owning the libs. That’s Republican policy in a nutshell these days.

To bring it back to the Israel example for a minute, that law has been mostly blocked by a federal judge, who ruled that an engineering firm that couldn’t get a contract with the city of Houston had its free speech rights violated by the Texas law. I Am Not A Lawyer, but it sure looks to me like the laws banning “boycotts” of fossil fuels and gun manufacturers are at least in the same neighborhood as the anti-Israel boycott law is. Credit Suisse and Blackrock probably don’t need the state of Texas’ business, but other red states are adopting similar laws, and at some point it does start to cost them real money. When that happens, the lawyers usually get involved. I don’t know what happens from there, but I won’t be surprised if that’s where it goes. The Chron has more.

Maybe we shouldn’t pave over our best rain-absorbing wetlands

Just a thought. Even just paving over less of them might be wise.

At the far west end of Houston along the Katy Freeway, where the concrete city gives way to bigger sky and taller grass, signs advertising new master-planned communities greet you before anything else, pointing left and right to new neighborhoods going up where prairie used to be.

While Harris County officials say the new development is not happening in the floodplain — since it is built atop mounds of fill — and will not increase flood risk downstream because of drainage requirements, such as detention ponds, the fact remains that development covers the prairie sponge with concrete.

Prairies serve as natural flood mitigation, absorbing more water than other types of land, retaining water in their natural depressions and slowing down the flow with their tall grasses.

The Houston region used to be covered in that type of vegetation, back when the state’s coastal prairie was 9 million acres of grass and wetlands. Less than 1 percent of coastal prairie remains in Texas, much of it in the Katy prairie — an area difficult to define these days since it continues to shrink, but in the 1990s was roughly bounded by the Brazos River, U.S. 290, Highway 6 and Interstate 10.

After Hurricane Harvey, then-Harris County Judge Ed Emmett took a strong position on the prairie in an opinion piece published in the Houston Chronicle.

“Officials at all levels should commit to preserving the Katy Prairie as a national or state park or nature preserve,” Emmett wrote. “That single act might do more to protect our community than any other. It will not only reduce future flooding, it will send a clear signal that we have a new attitude — that we recognize the value of maximizing natural green space and we understand the importance of allowing waterways to function without interference.”

That has not happened.

In the five years since Harvey, thousands of new homes have been built on the prairie and former rice farms above the Addicks and Barker reservoirs.

The reservoirs operated as intended in Harvey, but homes upstream and downstream of Addicks flooded anyway, prompting lawsuits that still are being litigated. The flooded homes were not a surprise to those who predicted development within the reservoir and upstream of it — combined with extreme rainfall — would lead to disaster.

Today’s new development continues a trend that has been underway for decades.

Between 2010 and 2020, nearly 100,000 people moved into the Harris County portion of the Addicks Reservoir watershed — a 138-square-mile area that drains into the reservoir — increasing the population there from 295,694 to 390,402, according to the Harris County Flood Control District.

In the Katy prairie area, from 2001 to 2019, 60,404 acres changed from having no pavement to some amount of development.

You can read the rest, there are lots of pictures from Harvey and earlier times to help you visualize it all. Harris County took some small steps towards discouraging development in flood plains, but as long as the county is growing and builders are looking for new tracts of land on which to build, this is what we’re gonna get.

Paxton still trying to intervene in the Genecis case

Never stop never stopping.

Best mugshot ever

Texas Attorney General Ken Paxton is attempting for the second time to intervene in a legal fight over gender-affirming medical care at two Dallas hospitals.

In an appeal filed this month, Paxton said that a lower court judge erred in ruling the state could not intervene in Dr. Ximena Lopez’s lawsuit against Children’s Medical Center of Dallas.

Lopez sued in March to reverse the decision to halt certain treatments for new patients and remove the branding at Genecis, a program for transgender youth that Children’s ran with the University of Texas Southwestern until November. While the program itself remains dismantled, a lower court judge ruled in May that Lopez could treat new patients using puberty blockers and hormone therapy while her case is being litigated.

In his appeal, Paxton said the state has an interest in the case because Lopez is challenging his interpretation of Texas law and has accused the governor of pressuring the hospitals to make changes at Genecis. He added the state acted “through” UT Southwestern, a public university, to discontinue certain treatments for new trans patients at Genecis.

See here and here for the background. I got this from the Daily Kos pundit roundup on Saturday, so that’s all I’ve got. In May, the district court judge in Dallas County gave Dr. Lopez and Genecis an injunction through April of 2023 to continue their work. Paxton had petitioned to intervene in the case, since the Children’s Medical Center of Dallas did not pursue an appeal, and we denied at the district court. He’s now appealing to the Fifth Court of Appeals – the state appeals court, not the federal one – with the goal (I presume) to put a hold on the injunction as the litigation proceeds. That’s about all I can glean from this excerpt, so we’ll see what that court has to say. I would expect Paxton to continue on to SCOTx if he loses again.