Republican Congress members upset banks dropping support for fossil fuels
Last week, Republican House members sent a letter to President Donald Trump in which they decried banks' recent re-evaluations of the risks of fossil fuel investments. While the letter doesn't call for any particular action, it repeatedly mentions the assistance offered to banks via the Coronavirus Aid, Relief, and Economic Security Act 9 (CARES Act), and it implies that the banks aren't living up to their end of the deal. Throughout the letter, its signatories seem to ignore the fact that the fossil fuel sector is not the only component of the US energy economy.
The letter was sent to Trump by a collection of 14 senators and 22 representatives, all Republican. In addition to Trump, the letter cc'd a few senior administration officials, including the secretaries of the Department of Energy and the Department of the Treasury and the CEOs of six banks. The CEOs of three fossil fuel industry groups were also included.
Financial headwindsThe letter comes as the recent events have accelerated banks' decisions to re-evaluate fossil fuel investments. In the long term, fossil fuel companies faced two significant challenges. The first is that wind and solar generation have become cost-competitive with fossil fuels in most markets. The second is that the pledges made to limit future fossil fuel emissions will likely mean that some fossil fuel deposits will be left undeveloped. That means that some of the resources now held as assets by fossil fuel companies will end up "stranded"-meaning the assets will turn out to have no value.
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