Movement to kill fossil fuels could impact nuclear power in Wyoming

***For all things Wyoming, sign up for our daily newsletter***

By Kevin Killough, Energy Journalist
[email protected]

The Environmental Social Governance (ESG) movement has quietly had a huge financial impact on the coal, oil and gas industries and, by extension, Wyoming’s bottom line.

ESG, also known as “sustainable investing”, is a controversial and well-used tool that financiers use to measure key drivers of potential investments based on company policies and the ethical impacts of corporate behavior. a company, such as its carbon footprint and its contributions to climate change.

“It’s way more real than anyone in Wyoming as a whole, other than maybe the bankers, understand,” Ogden Driskill, R-Devils Tower, told the Cowboy State Daily.

While the impacts of climate change account for a large portion of ESG scores that have impacted fossil fuel investments, ESG has never looked favorably on nuclear power, even though it does not produce no carbon dioxide emissions.

As Wyoming explores nuclear power, there are concerns that ESG could also limit its potential.

Origins of the United Nations

ESG incorporates many factors into how it assesses companies, including equal pay for women and equal representation on boards, in addition to greenhouse gas emissions and environmental sustainability.

Betsy Atkins, entrepreneur and corporate governance expert, said ESG first appeared in a 2006 United Nations report on responsible investing.

Writing in Forbes, Atkins explains that this was the first time that ESG criteria had to be required as part of companies’ financial assessments. In 2006, 63 investment companies with $6.5 trillion in assets under management signed ESG commitments. In 2019, that number grew to 2,450 companies representing over $80 trillion in assets.

50% decline

Amrita Sen, research director and co-founder of Energy Aspects, wrote in the Financial Times last year that the move had led to a 50% drop in investment in oil and gas exploration between 2011 and 2021.

The impact of ESG has become so pronounced that some Wyoming lawmakers have attempted to limit its influence.

Last spring, the Minerals, Enterprise and Economic Development Committee debated a bill that would have prohibited banks and other lenders from considering ESG in their lending practices.

Senator Bo Biteman, R-Ranchester, sponsored the bill and compared the ESG to the social credit scores that the Chinese government distributes to its citizens, which has huge impacts on their social and economic opportunities. Biteman’s bill died in committee.

Biteman did not respond to requests for additional comment.

Potential for impact on other areas

Driskill, who co-sponsored the bill, said he heard oil company representatives at the Energy Council’s annual meeting in Texas last month talk about the damage the move had done to their businesses. Driskill said he fears that ESG, as is the case with fossil fuels, will also start to impact agricultural investments.

“It’s a trend that’s terrifying if you’re a natural resource producer,” Driskill said.

Wyoming isn’t the only state pushing back on ESG. Asset management giant Blackrock Inc. has long been a strong advocate of ESG. Louisiana’s treasurer wrote a letter to Blackrock’s CEO stating that ESG would “destroy” the state’s economy, and that Louisiana would divest nearly $800 million of Blackrock’s investments.

nuclear opposition

While the ESG gives nuclear power high marks for zero-emission energy, nuclear companies get low marks for high water consumption, nuclear waste, and safety.

TerraPower, backed by Bill Gates, is building an advanced nuclear reactor near Kemmerer.

The company declined to comment on the ESG, but the company’s marketing materials say its project in Wyoming potentially provides enough power for 400,000 homes, entirely without CO2 emissions. The reactor uses an amount of water comparable to that of conventional reactors and about the same as a coal-fired power plant. It is also safer than conventional reactors.

According to TerraPower, nuclear waste can be safely stored onsite in dry drums that can withstand everything from earthquakes to projectiles. More than 100 sites across the United States use the same system without any security or environmental contamination.

According to the Nuclear Energy Institute, all nuclear waste produced by the commercial nuclear industry since the late 1950s would fit on a football field the height of a three-story building.

“Jane Fonda caused global warming”

Opposition to nuclear power flourished in the 1970s when “The China Syndrome”, starring Jane Fonda, was released. The film depicts a nuclear power plant approaching core meltdown following a reckless owner driven by greed. A few weeks after its release, the Three Mile Island nuclear accident occurred.

Although no one died in the accident, the combination of a popular film and a sensational event cemented opposition to nuclear power.

Rep. Dave Miller, a Republican from Riverton, co-sponsored the 2020 bill that allows gas and coal-fired power plants to replace their generators with small nuclear reactors like the one TerraPower is building.

Miller told the Cowboy State Daily that in the 1970s, 250 nuclear power plants were ordered before “China syndrome” and the Three Mile Island accident.

If these nuclear plants had been built, about 50% of America’s electricity today would come from nuclear power, Miller said. Currently, 97 are in operation and produce about 20% of the electricity Americans consume.

Instead, coal-fired generation, which produces large amounts of CO2, has become America’s main source of energy.

Essentially, Miller joked, “Jane Fonda caused global warming.”

Compromise

E&E News reports that the ESG movement was originally driven by the idea that tackling climate change could be done entirely with wind and solar. Pushed by nuclear advocates, there is growing recognition that nuclear energy will have to be part of the national solution to climate change.

Whether or not ESG will continue to weigh on companies investing in nuclear power remains to be seen.

University of Wyoming energy economist Robert Godby said all energy sources have tradeoffs.

“When we look at studies of how you are going to deal with climate change and you look at energy policy under different scenarios, all the scenarios are very difficult. You can’t do this with renewables alone,” Godby said.

One of the big trade-offs with wind and solar, Godby explained, is that you get carbon-free electricity but lots of land. It’s not just wind and solar farms, but because the sources depend on the weather, the energy has to be transported from where the weather is nice to where the energy is consumed. This means a lot of land for transmission lines.

“Whereas some people may have a preference on certain paths of development or others. Those choices must be made considering all the trade-offs,” Godby said.

***For all things Wyoming, sign up for our daily newsletter***

Comments are closed.