Texas law puts business limitations on companies not investing in oil and gas

HOUSTON, Texas (KTRK) — If a monetary firm does not make investments in oil and gas, it might probably’t do business with the state of Texas. It’s a law handed over the last legislative session and it targets companies that the state defines as boycotting oil and gas. Even although, some recommend it’s little greater than taking part in politics in an election yr.

Oil and gas are a monetary pillar in Texas. Upwards of 200,000 Texans make their dwelling in the trade, and the Republican-led legislature handed a law to assist defend these jobs and that a part of the vitality trade.

“This law was a way for Texas Republicans to show that they were on the side of the oil and natural gas industry, which is one of Texas’ most important industries,” Baker Institute Political Fellow Mark Jones mentioned. “The real goal of this law was to signal to Texas voters, as well as people nationally, that the state of Texas was going to fight for the oil and natural gas industry and the jobs and the income that it represents for the state of Texas.”

The law prevents any state entity, together with pension funds, from doing business with a financial firm or bank that boycotts oil and gas.

More particularly, it targets companies that observe what’s often known as Environmental and Social Governance, a strategy of screening investments primarily based on company insurance policies and which inspires companies to behave responsibly.

The workplace of State Comptroller Glen Hegar got here up with an inventory which, right now, includes 10 companies which can be now not allowed to do business with the state.

“You have a substantial trend of not investing in the oil and gas industry,” Hegar advised ABC13, “and as listeners know in the Houston area, that is an important part of not just the Houston economy, the Texas economy, but really the global economy.”

Katie Mehnert, who’s the CEO of ALLY Energy, says the law is gamesmanship.

“My view is it’s political pandering,” she mentioned. “The government has no role in this, particularly in state government and particularly in our state where energy, and all energy, matters. So fossil fuels matter for the state economy and so do renewables. And Texas leads the way.”

While the state does make exceptions if the transfer would unnecessarily hurt an company or pension, the pinnacle of the Texas department of the American Federation of Teachers, Zeph Capo, does not just like the development.

“This short-term thinking is really quite concerning for the retirees,” Capo mentioned. “The people who depend on the retirement systems to make the best fiduciary decisions.”

Hegar defends the observe as important to Texas’ future.

“If you don’t invest in oil and gas, a lot of the fabric, the basic parts of the daily lives that we operate on, regardless of the industry that you work in and work for really those things deteriorate,” Hegar mentioned.

The record is fluid. It can change as regularly as each quarter. And extra dialogue concerning the challenge is predicted in the following session, which begins in January.

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