When Joe Biden was running for the presidency, he promised he would decarbonize the U.S. economy by ending American oil and gas development. So far, American oil production is down under Biden by about 1 million barrels a day — even though the world price of oil has nearly doubled to $110 a barrel. This means that America is already losing more than $100 million each and every day to the “green” climate-change agenda.
Fortunately, Congress has blocked many of the radical Green New Deal legislative proposals, so now Biden has turned to his super-regulators at the Environmental Protection Agency and the Interior Department to finish the job of dismantling American oil, gas and coal production.
But the latest shot across the bow of the oil and gas industry is perhaps the most dangerous of all. Last week, the three Democrats on the Securities and Exchange Commission (SEC), led by Chairman Gary Gensler, voted to force all publicly traded companies to disclose their greenhouse gas emissions, including “indirect emissions.”
The proposal, known as “The Enhancement and Standardization of Climate-Related Disclosures for Investors,” runs 510 pages.
The SEC’s own estimates indicate that the paperwork burden alone will cost companies $10.2 billion. But the real cost could be multiple times higher than that.
But how are investors being protected with these rules, and from whom? Activist hedge funds, university endowments, pension funds and foundations will immediately use this information to bully companies and void future investments in fossil fuels — the dream of Biden’s economic policy team. Don’t forget this is coming from a president who says he is “doing everything we can to lower gas prices.”
My group, the Committee to Unleash Prosperity, recently sponsored a poll of voters which found that twice as many Americans think the government should focus on ensuring affordable energy rather than addressing climate change. Making energy more expensive — as this rule would do — reduces shareholder returns.
This rule isn’t just bad news for American energy security and for motorists who are sick of paying up to $5 a gallon for gas.
The SEC is supposed to be the watchdog to ensure the soundness of our financial system and to protect small investors and pension funds from fraudsters. The agency didn’t do a very good job of that back in the early 2000s during the Enron scandal, or in 2008 when we saw the collapse of mortgage-backed securities — which were supposed to be AAA investment bonds. When the regulators were asleep at the switch, those overvalued bonds collapsed almost overnight, which set in motion a financial crisis that flattened the entire American economy for several years.
Now these same financial watchdogs are telling us they are expert climatologists and can assess risks from weather events, like hurricanes, droughts and tornadoes.
The purpose of the SEC is to protect investors’ lifetime savings. But the $10 billion estimated cost of these new regulations would be effectively a tax borne by the investors who have ownership in these energy companies.
Of course, companies should assess risks of hurricanes or earthquakes and other acts of nature that can cause catastrophic losses. But our sophisticated financial markets, led by savvy investors, already assess the risks of such things as threats of flooding of beach-front properties — and these risks are already capitalized into prices and stock values. Very few smart investors take seriously the doomsday climate-change models that already have been proven to be severely flawed predictors.
Republican SEC commissioner Hester Peirce protests that the agency is “laying the cornerstone of a new [corporate] disclosure framework that will rival our existing framework in magnitude and cost and probably outpace it in complexity.” She further warns that this climate project will divert the SEC’s attention from fraud prevention, and will “facilitate the growth of the climate-industrial complex, and foster unfair, disorderly, and inefficient markets.”
She’s right. Many in the trillion-dollar climate-change industry will get rich off these policies. But that will come at the expense of the mom-and-pop investors whom the SEC is supposed to be protecting.
Stephen Moore is a senior fellow at FreedomWorks and was a senior economic adviser to President Trump. His latest book is “Govzilla: How the Relentless Growth of Government Is Devouring Our Economy, and Our Freedoms.” Follow him on Twitter @StephenMoore.