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Energy Discrimination Bill Is the Wrong Approach

Republicans are lining up to oppose Sarah Bloom Raskin, President Biden’s nominee for a critical regulatory post at the Federal Reserve. They are concerned that Ms. Raskin will try to use her regulatory powers to force banks to join her climate crusade.

I’m with them.

I completely agreed with the letter signed by over 20 state fiscal officers, including West Virginia Treasurer Riley Moore, that stated, “All financial institutions should evaluate their relationships with reliable energy companies, just as they would any legal business, without prejudice or preference, based on risk and return.”

The problem is Republicans seem to have amnesia about this principle when it comes to banks evaluating energy clients based on risk and return and deciding to limit their exposure to the industry. Republican-controlled legislatures across the country, including ours in West Virginia, are seeking to put big government’s thumb on the scale in these evaluations and tell banks who they must serve.

Senate Bill 262 would punish financial institutions seeking to curb fossil fuel energy exposures. This bill would authorize the state treasurer to restrict state contracts with any bank or investment group that “refuses to deal with coal or natural gas companies.”

Energy production is a critical component of West Virginia’s economy, and will likely remain so for the foreseeable future as the U.S. continues to heavily rely upon fossil fuels for consistent and reliable energy.

Given this, it is understandable why Republicans in our state would do everything in their power to protect the industry, but they must not abandon their small-government, conservative principles in the process.

West Virginia ranks fifth in the country in energy production by being the second largest coal producer and the seventh-largest natural gas producing state. But it’s not just fossil fuels–West Virginia is also responsible for producing hydroelectric power and wind energy, which accounts for nearly 5% of the state’s electricity generation.

As Republican Gov. Jim Justice looks for ways to promote these vital industries, he should not support policies that are inherently anti-free market, like Senate Bill 262.

This measure runs afoul of the key conservative principle to support private sector innovation and oppose burdensome governmental regulations. This bill would require banks to submit evidence of their “continued commercial support for oil and gas firms” to avoid debilitating economic sanctions. This stipulation alone is overreach, and counter to Republican principles, and is why Gov. Justice should veto Senate Bill 262.

Both Raskin’s approach to affect climate change policy through banking regulation and this GOP approach to prop up the energy industry through regulation are wrong, and are in direct opposition to free market capitalism that Republicans campaign on. What grounds do we have to stand on if we chastise Democrats for overreach and then take a similar approach to accomplish our own agenda?

Consistency is important, and Senate Bill 262 should be rejected.

Private businesses should have the right to pursue long-term profitability, and set their business up for success. Republicans should support this right of businesses to do so instead of punishing them based on an arbitrary standard of “boycotting” fossil fuel companies. It should be up to consumers to decide to punish these banks for their activities if they disagree with them, not the government. I am supremely confident that State Treasurer Riley Moore will do the right thing with our states funds, and does not need the difficulties that would be imposed on his office by a bad bill like 262.

Hopefully, Gov. Justice will stand on conservative principles and oppose this expansion of government intervention into private business decision-making by vetoing Senate Bill 262.

I urge you to contact Gov. Justice and let him know that Senate Bill 262 would hurt more than it would help.

Dolph Santorine is a Wheeling resident and former candidate for the West Virginia House of Delegates.

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