U.S. Bank's Divestment Conflicts With National Interests
Since the 1970s, the U.S. Department of Energy (DOE) has championed an important mission for the future of our country: “to ensure America’s security and prosperity by addressing energy, environmental and nuclear challenges through transformative science and technology solutions.”
Across all economic sectors, energy plays a critical role as the driving force behind a modern economy. Whether generating power through fossil fuels, nuclear or renewables, the United States’ future is rooted in long-term investment in a stable and innovative network of energy infrastructure. Across all types of energy generation, DOE is responsible for regulating and promoting policies that will push the U.S. toward greater energy independence, and greater national security. Beyond cost savings and benefits to the business community, and the valuable research and scientific advances that have come from DOE projects, this approach of embracing all technologies is prudent for advancing energy independence benefits for every American citizen today.
But a handful of activists have pushed back, arguing that the government and financial institutions that provide funding for these projects should reject investments in fossil fuels, and by extension, infrastructure projects that support energy development. Recently, these groups have focused on pipeline infrastructure projects, urging public funds and the banks that support them to divest from any and all affiliations with these projects.
Not only is this fiscally unsound thinking, risking the futures of millions of public employees, but the pressures these groups have put on financial institutions have also brought banks directly into conflict with a core mission of the U.S. government and the current administration’s efforts to revitalize our nation’s energy infrastructure.
One notable example of this activity was a policy announced by USBancorp in their 2017 Environmental Responsibility Policy that prohibits the bank from financing pipeline projects and subjects new and existing bank clients that build energy infrastructure projects to heightened scrutiny of their policies and practices. Its main affiliate, U.S. Bank, is one of the leading providers of credit services for many government agencies including, ironically, the Department of Energy.
The implications of this single line in a corporate social responsibility policy for U.S. Bank now draws a major credit provider of the government directly into conflict with a central mission of the government – to promote and regulate responsible and necessary energy infrastructure development.
In the 1970s, we were faced with several oil crises, leaving our economy stricken and our citizens waiting in long gas lines, uncertain of their financial future. Our reliance on foreign oil was America’s Achilles heel and since those days we have worked toward developing our own energy resources to ensure that our economy is no longer subject to the whims of hostile foreign governments.
While we continue to advance our study and implementation of renewable energy generation, we must continue to pursue an all-of-the-above strategy, which embraces the responsible use of natural resources and constructs the energy necessary to safely transport it in an environmentally friendly manner. This includes continued investment in pipeline infrastructure.
U.S. Bank is now out of step with government policy. At a minimum, the current administration should re-evaluate its relationship with the bank because a bank that cannot be trusted should not be relied upon to assist the work for the federal government. At the same time, no responsible institution should be pressured, or should yield to foolish actions like divestment or policy changes dreamed up by pressure groups and their agenda-driven backers. The advocated changes are based on utopianism rather than logic and demonstrate that most of the advocates are demonstrating for fun or for the cause, rather than for goals that will benefit our environment. Instead of resorting to demonstrations and violence, those advocates should know that the U.S. government and current administration still maintains infrastructure development as a core mission vital to continued economic growth.
Dr. Jack Rafuse was White House energy adviser under President Richard Nixon and the current principal of the Rafuse Organization.