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During last year's Texas Legislative Session, the Texas Legislature passed the Oil & Gas Investment Protection Act (SB13) which bans state entities such as pensions from investing in financial companies that boycott energy companies. The company BlackRock was added to a list of those companies.
“When the Senate passed Senate Bill 13, we made it clear that Texans will not tolerate Wall Street turning its back on our flourishing oil and gas industry and the millions of Texans who rely upon it," Texas Lt. Gov. Dan Patrick said in a press release. "As long as I am lieutenant governor, I will never back down from defending our oil and gas industry and I remain committed to ensuring Texas is the top state for oil and gas in America.”
Patrick warned specific companies.
"As you prepare the official list of companies that boycott energy companies, I ask that you include BlackRock, and any company like them, that choose to hurt Texas oil and gas energy companies by boycotting them in violation of Senate Bill 13," Patrick said.
Patrick continued to criticize BlackRock.
"BlackRock is capriciously discriminating against the oil and gas industry by exiting investments solely because companies do not subscribe to a 'net zero' policy beyond what is required by law," Patrick said.
BlackRock CEO Larry Fink did offer statements to try and moderate his company's position.
"Divesting from entire sectors – or simply passing carbon-intensive assets from public markets to private markets – will not get the world to net zero," Fink said. "BlackRock does not pursue divestment from oil and gas companies as a policy."
Comptroller Glenn Hegar noticed the difference in BlackRock's public and private statements.
"We are carefully monitoring the public statements made by companies and their leadership," Hegar said. "Telling the state of Texas one thing while telling coastal investors another will not shield a company from our process.”
Under the law a company is viewed as boycotting energy companies if it limits relations with an entity involved in the fossil fuel energy sector if the entity "does not commit or pledge to meet environmental standards beyond applicable federal and state law[.]" The new law mandates that the Comptroller of Public Accounts maintain a list of companies who do not do business with or penalize energy companies because they do not pledge to meet regulations that exceed state and federal law. Letters are delivered to the companies listed alerting them that the state of Texas will divest from their company or fund if they continue their boycott of energy companies.
BlackRock CEO Larry Fink wrote a 2022 letter to BlackRock invested companies where he said businesses not anticipating a carbon-free future risk being left behind and that it was a focus of BlackRock to help lead the transition to "net-zero." The letter also said that "climate rise is investment risk" and BlackRock would be "exiting investments that present a high sustainability-related risk" while "launching new investment products that screen fossil fuels." BlackRock was founded in 1988 and manages $10 trillion.
Texas leads all states in crude oil production, and has in every year but one since 1970. Nearly a quarter of America’s natural gas reserves are in Texas. Texas also creates more electricity than any other state, doubling second place production of Florida. Natural gas accounts for a majority of that production as of 2020. Also in 2020, renewable energy accounted for a fifth of utility-scale net generation in Texas.