There was a curious dance of finance in Houston on Tuesday. Lieutenant Governor Dan Patrick pretended that BlackRock, the world’s largest investment firm, was not on the state’s blacklist for having Environmental, Social, Governance (ESG) and Diversity, Equity, and Inclusion (DEI) policies, and CEO Larry Fink, who wants to do business in the state, rather graciously let him.
The Texas Power Grid Investment Summit was launched by the two men as a way to get more natural gas plants in the state. Texas’s electrical grid (the only one in the continental United States not connected to an interstate network) famously failed during Winter Storm Uri in 2021. While Top GOP officials were quick to blame wind and solar generation, a large percentage of the loss of power was from natural gas plants that had not been sufficiently winterized. The problems in the grid have persisted since, thanks to blisteringly hot summers that have repeatedly brought the energy network to the brink as Texans struggle to keep cool.
In 2022, Texas passed a law prohibiting state contracts from going to companies that had DEI policies, sought to move away from fossil fuels, or refused to invest in gun manufacturers. The anti-business proposal was part of a widespread “anti-woke” culture war being waged by the GOP at the time, and it has mostly blown up in their faces. Fewer businesses operating in Texas means fewer bidders, and the state has paid an extra $416 million in since.
BlackRock has repeatedly denied being on the blacklist, but its company policies are in direct opposition to Patrick and other Republicans’ crusade against environmental and social justice. On their website, BlackRock proudly lists their commitment to DEI and ESG, including having $225 billion wrapped up in sustainable growth. Clearly, little about the company that irked Texas Republicans in 2022 has changed.
Patrick made that clear in his statement before the event.
“My stance on [ESG] and [DEI] policies have not and will not change,” said Patrick. “They should not be part of any funding agreement in Texas. I appreciate BlackRock, especially Larry Fink, for bringing a variety of investors to this conference. I look forward to this summit and finding partners who share our vision. Texas is, by any measure, the best place on the planet to invest.”
Tellingly, the summit was not BlackRock announcing that it was investing in Texas power, but more of moral support for the idea of other companies that aren’t too “woke” to do so. Fink seems to be doing Patrick a favor without making Patrick admit he needs companies that have DEI and ESG policies to fund the state’s inadequate power sector.
Ed Hirs, an energy economist at the University of Houston, saw the move as a little desperate. Patrick bragged that the summit had gotten $2.2 trillion worth of investment into the room, but it didn’t look like a position of strength to Hirs.
“If you’ve got $2 trillion worth of investors and they’re looking for a deal … they wouldn’t have had this summit; there would already be power plants being built,” he told KUT. “All of these guys are sharks. They’re not going to miss an opportunity to make a profit.”
If the investor money doesn’t come through, Patrick has vowed that the state would build plants itself and hire contractors to run them. This will add to the increasing list of extra money that has resulted from the “anti-woke” blacklist.