Last month, the French government pressured Engie – a company that delivers natural gas to homes and businesses all over France – to call off or delay a 20-year, $7 billion contract with a Houston-based company called NextDecade to export Texas natural gas (1). Apparently, the French are concerned Texas gas is too dirty.
This misplaced concern about emissions will do more harm than good. Alaska Governor Mike Dunleavy summed it up well when he recently stated that “cutting production in the U.S. only to see that demand met by dirtier producers elsewhere in the world results in more pollution and more environmental damage. Instead, we should be promoting cleaner production here at home.” (2)
I couldn’t agree more. France is going to have to get their natural gas from somewhere, and wherever it is it’s going to cause more harm to the environment and geopolitics. France may get its natural gas from Iran, which has dangerous nuclear ambitions and has threatened to blow up Israel several times. Or they could turn to Russia who has dangerous ambitions and invaded Crimea just a couple years ago. Or they could look to the Middle East, a region not exactly well known for its respect of Western legal traditions.
America, on the other hand, leads the world in the production of clean, affordable energy. In August, my agency, the Railroad Commission of Texas, announced that less than a half percent of the gas produced in Texas was flared or vented, meaning 99.5% went to beneficial use. Nationally, the six major air pollutants monitored by the Environmental Protection Agency (EPA) have fallen 73 percent since 1970, while our economy grew 262 percent and our population by 60 percent. (3)
As you can see, despite the claims of the sensationalist, fake-news media, the environment in America is getting better, not worse. At the same time, prior to the pandemic, we were producing more oil and natural gas domestically than any time in history, creating jobs, helping our economy, and bringing us national security in the form of energy independence.
Unfortunately, environmental extremists are seeking to undo these tremendous gains on every front. We all know about their efforts politically on the national level with proposals like the Green New Deal, fracking bans, carbon taxes, and the Paris Climate Accord, which President-Elect Joe Biden plans to rejoin. This would be a tremendous mistake. The accord carries sky-high costs with very low benefits and unfairly imposes a double standard based on unproven assumptions and climate models that are wrong nearly all the time.
According to a report by the U.S. Chamber of Commerce, the cost of the Paris Climate Accord to the American economy is steep. The agreement will cost American workers 6.5 million jobs and $3 trillion in economic growth by 2040 (4). The justification for killing millions of American jobs and causing trillions of dollars of damage to our economy is the potential decrease of global temperatures by 0.17 degrees Celsius by 2100 – and that is only if the Paris Accord is implemented perfectly. The Paris Climate Accord is a classic example of what happens when policy is based on politics disguised as science. At the same time the economic devastation of these policies threatens our ability to safeguard against our naturally dangerous climate and other threats our modern machine-based civilization protects us against – provided we can fuel it with affordable energy.
Radically environmentalists aren’t stopping at fighting for increased regulation and unfair treaties. They are coming for your retirement account as well vis-à-vis Environmental, Social, and Governance investing, the new “woke” way to save money. It is an investment strategy whereby an individual investor or financial products, such as mutual funds, invest assets in equity of a company or financial products that are subjectively considered environmentally and socially conscious.
In practice, this strategy has caused the divestiture of assets from oil and gas production companies. The goal of ESG investing is to deprive legitimate companies with widely used products and services from necessary capital investment because they, in the opinion of some, cause some indirect or amorphous social harm. ESG investing could cause record bankruptcies in the U.S. energy sector, destroying millions of high-paying jobs and American energy independence. All without removing any of the environmentally harmful energy produced by state-owned companies directed by tyrannical governments.
ESG investing is growing quickly. From 2016 to 2018, ESG funds in the U.S. increased 44 percent from $8.1 trillion to $11.6 trillion (5), which represents one in four U.S. dollars under professional management. This is despite a Pacific Research Institute study last year that found the S&P 500 outperformed a broad basket of ESG funds over a decade by nearly 44% (6).
Terrible climate accords, bad investment decisions, and contract cancellations – this is what radical environmentalism gets us. It may have been just one contract of one company in France. But what is happening with Engie – and the thought process underlying it – is emblematic of what is happening everywhere. Natural gas is clean, reliable, and affordable – why is that no longer good enough?