A recent decision by U.S. Bank to placate fringe environmental movements should have federal officials seriously rethinking the official relationship between U.S. Bancorp and government agencies. At a shareholder meeting in April, the company agreed to exclude gas and oil pipelines from their project financing — a bow to pressures from environmental groups who are calling for financial institutions to withdraw from investments in fossil fuel industries. Not only is this bad fiscal policy, it’s adverse to government policy and an insult to thousands of hard-working Americans.
From a financial standpoint the call to divest makes little sense, and even less sense when it comes to official policy. Voids in the marketplace are immediately filled by other investors, and demand for energy of all forms continues to rise across the country. America’s intertwined infrastructure networks link everything from energy production in windfarms and oil fields to electrical generation facilities, manufacturing plants, food production, and the myriad of other industries that build the products which comprise the fabric of our modern society. Even the factories that manufacture renewable energy technologies rely on this interconnected grid which includes fossil fuels.
Interconnected infrastructure is the result of a strong pursuit of an “all of the above” approach to energy policy. The position of U.S. Bank places the company out of step with the policies of the federal government, and out of step with the needs of the American people.
Strikingly, U.S. Bank is a provider of financial products and services to multiple federal agencies including the departments of Defense, Treasury, Homeland Security, Agriculture, Veterans Affairs, Health and Human Services, State and Energy, and the Internal Revenue Service and U.S. Postal Service.
It is offensive that a company like U.S. Bank, which now publicly spurns investment in infrastructure projects that support American energy development and jobs can act as a payments and financials manager for organizations like the Department of Energy, which seeks to address America’s energy challenges, or for the Department of Defense, where the Corps of Engineers oversees and promotes construction of energy infrastructure. And even at perhaps at the most direct contact between citizens and their government, the U.S. Postal Service, which relies on fossil fuels every day to deliver the mail.
Commitments by the Trump administration to modernize and update American infrastructure have renewed the federal government’s stake in energy development. These efforts, guided by public-private partnerships, will require financial institutions, alongside federal budgetary allocations, to make sound fiduciary decisions that will benefit the American people through investment in our common infrastructure.
Policies or rhetoric by financial institutions that seek to limit or restrict pro-growth investments simply do not coincide with the mission of the United States government.
Since U.S. Bank fails to recognize the responsibility of a financial institution whose services are contracted by the government to pursue policies that benefit the citizens of the United States, perhaps it is time for the federal government to reconsider its relationship with U.S. Bank.
Darren Bearson is the president of Compass Point Strategies and was a senior policy adviser at the Department of Energy under President George W. Bush.
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