Utah is uniquely poised to benefit from a new economic revolution. Unfortunately, our state treasurer is sending the opposite message and putting that at risk.
The auto industry is going all-in on electric vehicles, with almost every major manufacturer investing heavily in electrification. Companies are building assembly plants for vehicles and batteries as fast as they can, and locking in contracts for critical minerals. States are lining up to attract those industries and the jobs and investment that go with them.
For example, Kennecott is expanding its operations in Utah as the world increases its need for copper, used in clean energy technologies from electric motors to wind turbines. Demand for lithium for batteries is driving new interest to produce it in Utah. The ACES project in Delta just secured a $504 million dollar loan guarantee for hydrogen energy storage. And the Utah FORGE project in Milford is at the forefront of enhanced geothermal drilling techniques, which produce 24/7 reliable electricity.
Meanwhile, Utah State Treasurer Marlo Oaks unilaterally pulled $100 million in state funds from the asset manager BlackRock to send them a message. Their offense, in his view, is investing too much in the coming energy technologies and not enough in the existing ones. Needless to say, choosing investments to make a political statement is not the state treasurer’s job. Utah enjoys a stellar reputation as a pro-business state exactly because it does not make a habit of stunts like this.
BlackRock is in business to make money for their investors, and they can see which industries have growth potential. As CEO Larry Fink put it in his letter to CEOs, “We focus on sustainability not because we’re environmentalists, but because we are capitalists and fiduciaries to our clients.”
This is exactly the way the market is supposed to work. Customers, stockholders and investors make those decisions. If they are wrong, then the market sets them straight.
The urge for politicians to defend legacy industries is understandable. Utah is a significant producer of fossil fuels and those industries are economic mainstays in some of our communities. No one wants to see harm come to these communities; in fact, we can and must help them through this transition by bringing in new investments.
But trying to hold back the economic tide won’t help them. All it will do is to put out the unwelcome mat for the new industries who want to locate in Utah.
The market wants to build clean energy and BlackRock is not alone. Tech companies like Facebook and Google are building data centers in Utah and promptly contracting for new clean energy to supply them, because that is what their customers and employees want them to do. Utah benefits both from the businesses themselves, and from the construction jobs those energy projects create.
Utah’s tech sector also supports clean air policies, because it’s good for the community and good for business. It’s easier to attract workers to Utah when they can see the natural beauty around us.
All successful business strategies involve investing in the future. Skate where the puck is going, not where it is now. Free markets hold businesses accountable for their decisions. Sound investments succeed and unwise investments fail. Government officials trying to tell the market what to do is not likely to be a successful strategy.
We have an opportunity to be at the front of the next wave of investment in energy technologies. Utah has advantages that other states can only dream of. We have earned our reputation as a pro-business, free-market state. All we have to do is walk the walk.
Tom Moyer, Pinebrook, is a mechanical engineer, working in military ordnance disposal robotics.