Utah Republicans, always quick to style themselves as defenders of the free market, are threatening to make life difficult for companies that want to make their own free-market decisions about how to meet the demand for electricity in the future.
Not that the global banks and regional power distributors will notice what li’l ol’ us has to say about any of it. It’s still embarrassing, and it likely means Utah gets left behind in a sustainable energy future that it could have led.
The most recent attempt to put a thumb on the scale of the energy future is a letter signed by Utah State Treasurer Marlo M. Oaks and State Auditor John Dougall, addressed to “To Whom It May Concern in the U.S. Banking Industry.” They are the most recent of treasurers, comptrollers and the like from now 15 states who are basically threatening the likes of CitiBank, Wells Fargo and Goldman Sachs that if they engage in a “boycott of traditional energy production” those states will have to reconsider investing or otherwise doing business with them.
As if JP Morgan Chase boss Jamie Dimon is lying awake nights worrying where Utah, West Virginia and Arizona are going to park their pension funds.
What’s going on out there in the real world is that the big banks are under pressure — from governments, activist groups, their own stockholders and, mostly, the energy marketplace — to curtail or eliminate their role in financing coal mines, coal-fired power plants and oil drilling (especially in sensitive areas like the Arctic and the Amazon).
The letter Dougall and Oaks signed, on the letterhead of the West Virginia State Treasurer Riley Moore, charges that banks are moving away from coal as a political statement, pushed by such personages as John Kerry, the U.S. climate envoy. And there is some jawboning from that quarter.
But these Republicans’ faith in the free market is very slim indeed if they think the likes of Deutsche Bank, Credit Suisse and Barclays are going to make their investment decisions based on what a Democratic administration or the Sierra Club thinks. They are going to put their money where, in their expert opinion, the future is.
And, increasingly, it ain’t coal.
A study published by CNBC documents that many banks, mostly in China and the U.S., are talking green but still putting money in carbon, while others, led by French, Swiss and German banks, are moving in the other direction.
Zurich-based megabank UBS issued a statement saying it is beginning “a multi-year process to reduce exposure to carbon-related assets.” Translation: Coal is risky and we are looking to get out. Not, necessarily, for the benefit of the planet, but to save our own skins.
It’s more than short-term returns on investment or political pressure. A world where floods, droughts, fires, megastorms and ski slopes with no snow become commonplace is not going to be good for business.
Many of those who buy a lot of electricity — like, say, the utility that supplies the city of Los Angeles — are telling their suppliers that they don’t want to buy any more dirty power. That’s why the big Intermountain Power Agency plant in Utah’s Millard County is beginning a transition from coal to natural gas and hydrogen. Although it’s owned by a consortium of Utah communities, it sells 98% of its juice to Southern California. Where state law prohibits new power contracts with coal-fired producers.
IPA is saying, “The customer is always right.” But a couple of weeks ago the Utah Legislature answered, “Screw the customer,” and passed a surprise bill stripping IPA of many of its legal privileges concerning state laws on procurement and open records.
Generally, we journalists are in favor of lowering any curtain that keeps the decisions made by big important operations like IPA out of the public view. But the Legislature clearly was less worried about transparency here than it is out to punish IPA for its move away from Utah coal and toward less carbon-intensive forms of power generation.
The determination shown by Utah Republicans to miss this train is striking.
Meanwhile, the city of Salt Lake City has joined with Park City, some ski resorts, Utah Valley University and others to launch a solar farm in Tooele County that will move the source of power for city-owned facilities from dirty coal to clean solar.
This progression is not a forced march toward green energy. It is the latest example of governments building highways because people want to drive cars, building airports because airlines need a place to land and, now, building a clean energy infrastructure because people want to go on living on this planet.
George Pyle, opinion editor of The Salt Lake Tribune, is in the market for a home powered by the static electricity generated by cat fur.