This column has been updated to make a correction.

When I first heard about an Oklahoma House bill aimed at preventing Oklahoma from doing business with companies that either boycott oil and gas activities or actively promote other companies divesting their oil and gas investments, I was pretty much against it. I’m not a big fan of laws that are protectionist in nature, and I’m definitely no fan of the boycott game.

However, I did a little more digging into the issue and the efforts of other oil and gas states to pass similar bills, and I came away with a different feeling. Now that the Democrats have control of the administration and Congress, there is a full-frontal assault on the oil and gas industry, and that assault is very much to the detriment of the Oklahoma economy and the economy of other oil and gas states as climate shareholders and activists are leading a growing movement to compel investors to divert their money away from fossil fuel projects.

House Bill 2034 is very similar to bills being passed or considered in Alaska, North Dakota, Texas and other energy-producing states where gross production taxes provide a large percentage of the state’s budget. Lawmakers are introducing legislation that would force states to stop investing in companies that use sustainable strategies to make financial decisions and to cut ties with asset managers, banks and insurers that are doing the same.

At the heart of the issue is ESG — the environmental, social and governance criteria that socially conscious investors use. And, it’s making a financial impact on the oil and gas business. According to an article published in Stateline, a Pew Charitable Trusts publication, it is getting increasingly difficult for fossil fuel projects to find insurance, financing and other backing if they don’t meet some of the sustainability standards. They are denied access to capital and loans.

As a former communications professional in the Oklahoma oil and gas industry, I witnessed first-hand the aggressive efforts of anti-oil and gas groups in their zeal to eliminate fossil fuels.

The large oil and gas company I worked for spent millions annually on meeting sustainable requirements, and the other large oil and gas companies I was familiar were doing the same. These companies’ sustainable efforts include reducing emissions, reducing flaring, water conservation (oil companies are working hard to recycle brackish water), people (diversity, inclusion and positive workplace environments) and community support (donating millions to support social causes in the communities in which they do business).

The company I worked for even constructed the largest building in Oklahoma to earn gold certification for Leadership in Energy and Environmental Design (LEED). It’s energy efficient, environmentally sustainable and created a healthy, safe and comfortable workplace for its employees.

Large oil and gas companies like the one I worked for have been on board with environmental and sustainability efforts in their operations for decades. Oil and gas companies have created efficiencies and technology to greatly reduce CO2 emissions. Pre-pandemic, from 2007 to 2019, U.S. CO2 emissions from petroleum and other liquids declined by 8.5% (219 MMmt). U.S. CO2 emissions from petroleum and other liquids declined by 0.8% (20 MMmt) in 2019 compared with 2018, according to the U.S. Energy Information Administration.

Although most companies in the oil and gas business work extremely hard to mitigate their environmental footprint and mitigate carbon emissions, it never is enough for these environmentalist investors and their allies.

Oklahoma is home to some of the most innovative oil and gas companies in the nation and the world. It is a part of their core values to continue to innovate and use technology to continuously improve their environmental performance. It may be time for this type of legislation to at least provide some cushion for the oil and gas industry.

So, I get why this legislation has been introduced. Oklahoma must continue to have a robust oil and gas industry, or face catastrophic state financial failures in the future. I think most Oklahomans understand the challenges of climate change, and our state has worked to include an “all of the above” strategy when it comes to energy sources.

But, Oklahomans also understand that fossil fuels are still the most reliable and affordable energy source, provide about 22% of the state budget and about 1 in 7 jobs in the state. Perhaps that deserves some protection.

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Allen is publisher and editor for the Enid News & Eagle.
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