ESG--The Bad News

You can't fix stupid

Though Biden and the Democrats will be blamed for high energy prices, the truth of the matter is more complicated and nuanced. Common sense is being assaulted on all sides by a generation of privileged, wealthy, and well credentialed buffoons. This does not lift the onus from the Democrats, because for many years now the party has ceased being the party of blue-collar working stiffs and become the party of the prissy wankers and to a large degree they are now one and the same.

We spend a lot of time reading about CRT, but there is another acronym being bandied about that has an equal (or greater) impact upon our day to day live: ESG. ESG is shorthand for the investment goals of hedge fund activists—Environmental, Social, Governance. Stupidity should hurt, but in this particular case the stupidity of the insulated, wealthy few is hurting those least able to tolerate it.

Consider: The largest oil producers in the U.S. do not plan to increase production through 2025, despite oil prices being over $100 per barrel. How can this be? Wouldn’t any reasonable executive be exploring the possibility of increasing production and getting the image of Sarah Palin saying “Drill, baby, drill!” tattooed on his ass? Why in the world is that not happening? With the business-friendly GOP poised to take the House and the Senate in November, why aren’t the major oil companies preparing to produce as much oil as they possibly can? The simple, stupid reason? These companies are going green.

Let’s look at ExxonMobil, the largest produce of petroleum in the US. Last year ExxonMobil announced it would produce about 3.7 million barrels of oil a day for the US market, and this would remain unchanged through at least 2025. Huh? What gives? Look no further than the ExxonMobil annual report of 2020 and the section titled “Positioning for a Lower-Carbon Energy Future”. In this report, Exxon announced it had “invested” $10 billion since 2020 “working to develop breakthrough solutions in areas such as carbon capture, biofuels, hydrogen, and energy-efficiency process technology that can help achieve the Paris Agreement objectives. In early 2021 ExxonMobil announced the creation of a new business, ExxonMobil Low Carbon Solutions, to commercialize low-carbon technologies.”

To any kid with a paper route this seems absolutely bonkers. You what? You invested $10 billion toward putting yourself out of business? However, if you’re a woke hedge fund manager with a house in the Hamptons and an Ivy League degree, this makes perfect sense. The kid on the bicycle, heaving papers, would be correct, however. The long term goals of ESG, now embraced by the major oil producers, is the extinction of their business.

WTF? How does this happen?

Follow the money. In 2015 the Obama administration crafted a regulation (not a law, but an edict from the US Dept of Labor) directing private retirement funds regulated under the Employment Retirement Income Security Act toward investments that heavily weighed ESG concerns. This caused about $38 trillion in investment money to be directed toward ESG—saving the world from climate change, rather than making a profit. What could go wrong? Next time you fill your tank and head to the grocery store, you will see exactly what can go wrong.

Blackrock, a hedge fund with more than $9 trillion under management, placed ESG environmental activists from the hedge fund, Engine 1, on the board of ExxonMobil in June of 2021. There are people directing the company today who want the company out of business, and while they work toward this goal their fund, and the individuals involved, will become increasing wealthy, powerful, and insulated from the repercussions of their ambitions.

The long and short being: defeating the Democrats in November will not fix this. We’ve allowed credentialed dickheads to achieve the seats of real power.

Working, actually producing something like a product of value? That’s for the plebes. Let them eat cake. The real money and power is in manipulating markets and pretending that windmills and solar farms are actually effective. We can blame the Democrats for being short sighted and silly, and they deserve it, but the real responsibility falls to all of us who allowed bullshit social justice theories to dominate education for decades, and then allowed the damaged ideologues these schools produced to seize actual seats of influence and power.

I haven’t looked to see who these Engine 1 activist board members actually are, because I’m afraid of what I’ll find. I imagine some white guy with a name like Thad, who’s parents were professors, who made his bones playing Lacrosse at Middlebury College before getting his Harvard MBA. Smug and comfortable, certain he is getting fabulously wealthy while still fighting the good fight for social justice. I could be wrong, but I’d only be wrong about the incidental details.

The nation is sitting on enormous reserves of petroleum. Something north of 43 billion barrels. And there are no plans to drill for it. And people are making wildly successful careers insuring that we don’t.

Something is broken.