April 4, 2022 Why Is Biden’s SEC Waging War on American Energy?
Russia’s war on Ukraine is changing the geopolitics of the world. The delicate situation calls for agility and improvising to adjust to a crisis that could quickly become ugly. The Biden Administration and Western Europe have imposed sanctions as part of a strategy to end the war.
However, the Administration is also applying “sanctions” upon the American energy industry to serve the ideology of the climate control left. America cannot win a war if it turns against itself.
There is no other way to explain it. President Biden is waging war on American energy, and his Administration is doing everything possible to discourage production. It can not know what it is doing.
A Devastating SEC Decision
A recent decision by the Securities and Exchange Commission (SEC) is a case in point. The Democrat-dominated body voted to advance a proposed rule that will wreak havoc on energy producers—right when they need to increase production to offset sanctioned Russian supplies.
The new SEC rule will expand the requirement that all public companies disclose the climate risks involved in their operations. This already egregious duty has now been made completely unreasonable.
Present law covers so-called “material” events and risks defined as information deemed important by a reasonable person. Such disclosures are usually very limited to those things impacting the environment that investors would need to know.
However, SEC Chairman Gary Gensler and his fellow Democrats voted 3-1 to redefine “materiality” to mean anything they want it to mean. The 510-page proposal broadens the requirements to require public disclosure of the risks of anything associated with carbon and climate change politics at any stage in production.
Contrary to the SEC’s Purpose
There has never been a proposal like this one in SEC history. The rule unloads a mountain of bureaucracy on already-struggling firms. It contradicts securities law and sound regulatory practice. Such disclosures favor progressive investors seeking to strangle oil and energy investment by depriving it of credit and capital. The new data provide ammunition to woke investors who can cancel offending companies.
The SEC exists to ensure investors have relevant information about publically traded firms. That’s it. It was never intended to be a policy-making agency imposing an ideology. Its purpose is to assure fairness in the securities markets, protecting investors against fraud.
The SEC was founded after the stock market crash in 1929. It sought to restore investor confidence by stopping the deceptive sales practices and manipulations that caused the crash in the first place. The commission established rules, supervision and forbade unfair use of nonpublic information about stocks when trading.
A Rule With an Agenda
The new rule uses this full disclosure requirement to demand information about greenhouse gas emissions and other climate ideology data. The new requirements are massive. They have no place in a volatile world where everything is upside down. The fanatical zeal of the green new dealers once more disregards reality in favor of de-development and eco-fantasy.
The new reporting must include all phases of production. This begins with the greenhouse-gas emissions caused directly by the operations of company plants and their energy consumption. Companies will also have to report on Scope 3 emissions, which means data related to supply chains and customer use.
All manufacturers will feel the fire of the regulatory state. However, these draconian requirements especially target oil companies, which will be required to estimate emissions from rigs, tankers and pipelines transporting oil and gas. On the product side, emissions from combustion engine consumption, plastics and other oil-based materials must be monitored.
The worst thing about Scope 3 emissions is that the SEC admits there is no clear definition for them. The commission has “not proposed a bright-line quantitative threshold for the materiality determination.” Everything depends upon the facts and circumstances surrounding each case. Thus, the potential for arbitrariness in rule enforcement is enormous. All it takes is an overzealous regulator to determine that an eco-factor is relevant to an investor’s supposed need to know.
Harassment on a Grand Scale
The new reporting is meant to intimidate. The commission has the authority to reveal only those things that are “necessary or appropriate in the public interest or for the protection of investors.” The SEC decision provided no proof that the new green ideology data fit the criteria for necessary public disclosure.
The SEC claims the new rule “will promote efficiency, competition, and capital formation.” However, it would add yet another layer of government regulation to the already excessive burden carried by companies. The threat of such exhaustive disclosures will discourage companies from going public and encourage stock buy-backs to return to the private sector.
In addition, it will expose private supply chain partners to disclose climate information that they usually would not have to report. All this information must be certified and audited, and companies will be liable for inaccuracies.
This huge effort is made to help woke, eco-friendly investors like BlackRock and public pension funds sniff out climate “offenders” whose only “crime” is using carbon like every human being in America.
The proposed rule will now be open for comments for 60 days before being finalized. Many states, such as West Virginia, have promised to sue the SEC for harassment of their energy industry. However, many rightly note that the damage has already been done. A shot has been fired over the bow of the energy sector. Even if federal courts throw the final rule out, the message has been sent. The war on energy has been declared. Investors beware. You are a target of the Democrats and their extreme green militants.
The message is equivalent to sanctions on the industry for doing its job. President Biden is declaring war on American energy in a time of crisis. The Administration knows this and nevertheless continues destroying the nation.