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The Energy 202: GOP lawmakers accuse Wall Street of 'discriminating' against fossil fuels during coronavirus pandemic


with Paulina Firozi

Republican members of Congress are coming to the defense of oil, gas and coal companies they say face “discriminatory” lending practices from Wall Street banks that have caved to pressure from environmentalists. 

They are worried that oil and gas companies, suffering from the economic shockwaves of the coronavirus pandemic, are not getting their fair share of $2 trillion in stimulus funding because many of the big banks playing a part in distributing the funds have policies against lending to certain fossil fuel projects.

In a letter sent late last week to President Trump, three dozen lawmakers urged the administration to take action against big banks that have decided to limit such lending.

The letter is the latest volley in a battle over cutting off the flow of financing to firms contributing to climate change. 

Since the 2016 election, green groups have increasingly put pressure on lenders, insurers, asset managers and other private-sector players to curb support for fossil fuels as their urgent calls about reducing greenhouse gas emissions over the next decade have been ignored by the White House.

But now, GOP lawmakers are concerned that fossil-fuel based companies are being put at a disadvantage when it comes to the once-in-a-century pandemic jeopardizing their businesses.

“As every sector of our economy struggles to survive the COVID-19 pandemic and seeks financial stability from the federal government, environmental extremists are using the pandemic to accelerate their goal of putting America's energy jobs in the grave,” read the May 7 letter, which was led by Sens. Dan Sullivan (R-Alaska), Kevin Cramer (R-N.D.) and Rep. Don Young (R-Alaska) and signed mostly by lawmakers from oil-, gas- and coal-producing states.

Several top ranking members on Senate and House energy committees signed the letter, including Sens. John Barrasso of Wyoming and Lisa Murkowski of Alaska and Reps. Rob Bishop of Utah and Greg Walden of Oregon.

They specifically point to a decision by BlackRock, the world’s largest money manager, to limit its investment in the coal power business and make managing for sustainability and climate risk a key part of its investing strategy. The firm, along with other big banks, is playing a key role in distributing stimulus funds under the CARES Act.

Last month, Cramer, Sullivan and Young, along with Rep. Liz Cheney (R-Wyo.), raised concerns about whether the asset manager could impartially lend money given its climate pledges.

“We urge you to ensure that the financial relief offered under the CARES Act is fully available to companies throughout the economy,” the lawmakers wrote in the letter to Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome H. Powell.

But it is unclear how much the Trump administration can do to stop banks from putting money where they want.

In their letter to Trump, GOP lawmakers do not offer any suggestions for what specifically the administration should do to encourage different lending practices during the pandemic.

Blackrock isn't the only big financial institution that has halted its lending to fossil-fuel projects in recent years. A number of big banks have taken steps to reduce their exposure to fossil-fuel projects. 

JPMorgan Chase, Wells Fargo and Citigroup have announced they would curb lending to Arctic oil and gas drilling projects, among other environmental pledges. 

Those self-imposed bans will make it more difficult for companies to raise money for exploring and producing in the petroleum-rich coastal plan of Alaska’s Arctic National Wildlife Refuge, which the GOP-led Congress fought hard to open to drilling in 2017.

The latest wave of climate pledges by big banks was kicked off before the pandemic by Goldman Sachs, which decided in December it would no longer lend money to oil and gas projects in the fast-warming Arctic region

The investment banking giant was followed a month later by BlackRock, which said it would limit its investment in the coal power business and make managing for sustainability and climate risk a key part of its investing strategy.

In making their climate pledges, big banks may be motivated not only by a desire to generate goodwill among shareholders concerned about the environment. 

They also likely want to protect their bottom lines.

Many investors are increasingly concerned that many of the crude reserves on the books of oil and gas companies may end up “stranded” — that is, that they will never be tapped because of political and technological changes over the next several decades.

Another Cramer — CNBC host and investment guru Jim Cramer — announced in January well before the pandemic rocked markets that he was “done with fossil fuels.”

And many members of the Rockefeller family, once the biggest name in petroleum during the halcyon days of Standard Oil, decided five years ago to dump its fossil-fuel investments.

“Now it also seems like a smart financial move,” my colleague Steven Mufson reported on Sunday. “The $1.1 billion Rockefeller Brothers Fund — largely free of oil and gas — has outpaced financial benchmarks, defying predictions of money managers.” 

Coronavirus fallout

Tesla wants to get back to work despite continued lockdown orders.

Tesla filed a lawsuit against a California county that's stopping the electric automaker from reopening its factory in Fremont, Calif. 

“The suit followed chief executive Elon Musk threatening in a series of tweets earlier Saturday that the company would sue and move Tesla’s headquarters and future programs to Texas and Nevada,” Faiz Siddiqui and Tony Romm report. “He appeared to leave open the possibility of maintaining some operations in Fremont depending 'on how Tesla is treated in the future.'”

“Tesla issued a statement late Saturday saying it would resume production at its facility, implementing social distancing by spreading employees out across its 6 million square foot facility and conducting on-site temperature screenings,” they write. “ … In the lawsuit, the company argued that the county-level orders are inconsistent and the state orders should supersede local orders.” 

It’s the second time in two months Tesla sought to defy county orders for sheltering in place amid the pandemic, Faiz reports

Alameda County spokeswoman Neetu Balram said in a statement: “Tesla has been informed that they do not meet those criteria and must not reopen … We welcome Tesla’s proactive work on a reopening plan so that once they fit the criteria to reopen, they can do so in a way that protects their employees and the community at large.” 

National parks are continuing to reopen. 

The National Park Service is slowly reopening more parks across the country, including Bryce Canyon and Capitol Reef in Utah, allowing access to visitors but leaving visitors centers and campgrounds closed, the Associated Press reports

Acting Park Service director David Vela called on visitors to read up and come prepared. “This gets to the value and importance of making sure that visitors know what to expect when they get to the park, making sure that visitors go to the park’s website (and) social media … as to what is accessible, how to plan your trip, and, most importantly, what are the expectations when you get there,” he said. 

Even with the limitations, advocacy groups worry it's too soon. 

“Parks absolutely should not open until the safety of National Park Service employees, concession employees, volunteers and other partners, including those who work and live in gateway communities, can be ensured,” said Phil Francis, who leads the Coalition to Protect America’s National Parks, told the AP.

In Tennessee, for example, Great Smoky Mountains National Park spokeswoman Dana Soehn described crowded parking lots and visitors without face masks after the site opened over the weekend, per the AP. “It seemed like people were not respecting our suggestion that they avoid crowded areas,” Soehn said.

Shores are opening up, too. 

Maryland Gov. Larry Hogan (R) is reopening some recreational activities across the state, a move that brought people to the Ocean City boardwalk over the weekend, even with the polar vortex-driven chilly weather. 

People were happy to be there, Fredrik Kunkle reports, “even if the new normal meant that people would be wearing masks and keeping their distance from each other while waiting to buy french fries.” 

Fighting fires is going to be harder this season. 

There are above-normal chances of large fires in Northern California in the coming fire season and “large significant” blazes forecast for Southern California. On top of that, the pandemic is creating yet another hurdle for first responders. 

“Realizing that wildfire smoke will steadily impair a firefighter’s immune system, and that traditional base camps can magnify the risk of infection, federal, state and county officials are urging a blitzkrieg approach to wildfires that will rely heavily on the use of aircraft,” the Los Angeles Times reports

Global warming watch

There are some combinations of heat and humidity that humans can't survive.

Hot weather that’s extremely humid, creeping toward the limit of what humans can survive, has more than doubled in frequency in some regions of the world since 1979, according to recent research. 

“The study is the first to find that wet-bulb temperatures of 95 degrees Fahrenheit (35 Celsius) — which render ineffective the human heat response of sweating to shed heat through evaporation, leading to hyperthermia — are already occurring for short periods of time at a few weather stations,” Andrew Freedman and Jason Samenow report. “These tend to occur in parts of the Persian Gulf shoreline and coastal southwest North America, where sizzling lands border sultry seas, as well as in northern South Asia, where extreme heat and humidity combinations overlap just before the annual monsoon season begins.” 

Unless humans make moves to adapt to such heat, some highly populated regions could become uninhabitable sooner than previously thought.

In other news

North Dakota's largest coal power plant is closing. 

The Minnesota-based owned of the 1,151-megawatt Coal Creek Station in North Dakota announced it is closing the plant in the second half of 2022, years ahead of schedule, the Bismarck Tribune reports. Great River Energy said it plans to add 1,100 megawatts of wind power by the end of 2023, and the “added wind power would effectively replace the 1,100-megawatt capacity of Coal Creek.” 

California officials will study the impact of gas stoves on indoor air. 

The California Air Resources Board is working toward two research projects to assess indoor air pollution in multifamily housing and disadvantaged communities, analyzing how stove types contribute to cooking pollution, Bloomberg News reports.

“Researchers have been studying risks associated with gas cooking emissions for about 40 years,” per Bloomberg. Advocacy groups also tell Bloomberg the pandemic-related stay at home orders add urgency to the issue of cooking pollution, as more people spend time inside.

“Murder hornets?” Now there is legislation for that.

House Natural Resources Chairman Raúl M. Grijalva (D-Ariz.) introduced a bill to pay for eradicating the invasive hornet that captured headlines this month, and for restoring bee populations that may have been affected. 

The Murder Hornet Eradication Act sets aside $4 million a year to grant to states with the Asian giant hornet, such as Washington state, where they were spotted last year. 

The Asian giant hornet, known as the “murder hornet” for its size and lethal venom, has made its first appearance in Washington state. (Video: Reuters)

The “murder hornet” could find a more suitable environment as climate change worsens. 

“Previous research has found that honeybees — a main target of the hornets — are threatened by climate change as environmental stress decreases their ability to ward off infection and forage for food,” E&E News reports. “And the Asian giant hornet can more easily adjust to a changing climate than honeybees because it makes its nest underground, limiting the hornets' exposure to extreme temperature changes.” 

“This hornet can exist in temperate regions anyway, simply broadening its range,” James Carpenter, a curator of wasps at New York City's American Museum of Natural History told E&E. “It would be allowed by a warming climate to do that."