ESG LURS: THE PHANTOM MENACE – Tired of hearing about ESG? We are sorry! Environmental, social and governance investment is heating up — and so is the GOP’s response.
We still can’t fully explain why Republicans decided to launch a new culture-war front against Wall Street’s embrace of calculating the dangers of climate change. It doesn’t seem to be resonating with voters or influencing investors. But candidates for finance office in Arizona, Florida, Illinois, Minnesota and Kansas have all taken anti-ESG positions.
After the midterm elections, Republicans are planning to build on the momentum they’ve built in states like Texas, Louisiana and West Virginia, where officials have pulled millions of dollars from BlackRock Inc. and other financial firms.
“We’re going to go full throttle once we get into 2023,” West Virginia Treasurer said Riley Moore, a Republican who leads a coalition of 15 state treasurers working to punish financial firms they say are boycotting fossil fuels. “We’re going to see a lot more movement on this at the state level. You’re really going to start reaching critical mass as it relates to assets under management and capital that can be leveraged against the ESG movement.”
In Congress, the beatings will continue until morale improves. If Republicans win a majority in the House next week, expect more aggressive oversight of the Securities and Exchange Commission’s proposed climate disclosure rule and an emphasis on climate risk at the Federal Reserve and other financial regulators. And more pressure on banks and asset managers.
“BlackRock and State Street and Vanguard and Invesco and Fidelity — these are great companies,” a member of the House Financial Services Committee. Rap Andy Barr (D-Ky.) said. “All we want is for them to live up to their history of being great American companies and delivering retirement security for Americans and stop this nonsense of politicizing capital allocation through ESG.
Read more from Jordan here.
LITHIUM CHICKEN – California is sitting in what Gov. Gavin Newsom (D) has called the “Saudi Arabia of lithium.”
But two of the three major companies seeking to extract lithium from the Salton Sea are opposing a new extraction tax Newsom signed into law earlier this year. The tax imposes an incremental rate per metric ton, while the tax some in the industry would prefer is a percentage based on actual sales, which would account for fluctuations in market prices.
“This new tax would be far more than this new industry could absorb.” Rod Colwell, the CEO of General Motors Co.-backed Controlled Thermal Resources said in an email. CEO Eric Spomer of EnergySource Minerals, a geothermal producer that aims to begin lithium production in the Salton Sea in 2025, also said he favors the percentage tax.
California is sticking to its guns, balancing the desire to lure industry to a region that can supply a third of world demand for lithium – a Annual value of $7.2 billion — against the goal of ensuring that local communities benefit from the extraction of a key ingredient for the green transition.
The State Department of Tax Administration and Fees is conducting a year-long study on which tax should be implemented in the long term. Lawmakers and environmental activists in the region are unfazed by industry pressure to speed up the timeline and go with the percentage-based tax. They point out that the third-largest company with designs on Salton Sea lithium, Berkshire Hathaway Inc.’s BHE Renewables, is on board with the per-ton tax.
“If they’re gone, they’re gone. If these people aren’t selling us the American dream, then maybe they should go somewhere else,” he said. Louis Olmedoexecutive director of Comite Civico Del Valle Inc., a nonprofit in Imperial County, south of the lake.
The region’s resources are likely too rich for companies to pass up, it said Ian Lange, an associate professor of economics and business at the Colorado School of Mines. The Salton Sea outpaces other domestic lithium supplies in both size and ease of extraction.
“It looks like they’re bluffing,” Lange said. “None of your other options are good. It is the quality of the deposit that matters.”
PRIMING PUMPS – President Joe Biden is paying attention to oil company earnings a week ahead of the midterms, calling ExxonMobil Corp. and Shell PLC on Monday for earning more than $28 billion in the third quarter alone.
He suggested a windfall tax if energy companies don’t boost domestic production and refining capacity instead of returning excess profits to shareholders and buying back shares. (California Gov. Gavin Newsom (D) proposed the same thing Thursday, notably without the call for increased production.)
But Biden did not endorse any specific proposal, which, as writes Josh Siegelcould disappoint Democrats in Congress, who proposed surprise tax legislation months ago.
It’s happened before, Carlos Anchondo and Mike Lee report for POLITICO’s E&E News. For most of the 1980s, the US had an excise tax on oil that functioned as a death tax.
It was applied to domestic oil producers when the price of oil rose above a predetermined price, according to a 2006 report by the Congressional Research Service. But the tax may have reduced domestic production by as much as 8 percent and made the US more dependent on foreign imports, the report said.
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– A UC Davis agricultural researcher known for protecting the meat’s carbon footprint receives most of its funding from the livestock industry reveals the New York Times. (Researcher answers: “Who should pay for sustainability research in animal agriculture, if not the livestock sector?”)
– An electric van company in the UK is moving its production to the US to get the sweet ones Inflation Reduction Act Tax credits.
– Elon Musk owns Twitter “it’s like putting the fox over the chicken when it comes to political misinformation,” The Post REPORTS.
