Energy

Oklahoma Bar Association official fights to overturn pro-energy law

May 10, 2024

Ray Carter

A leading official with the Oklahoma Bar Association is also leading the charge to overturn a state law that prevents institutions from financially starving Oklahoma oil-and-gas businesses.

Former state Rep. Collin Walke, an Oklahoma City Democrat, is the attorney representing an individual challenging Oklahoma’s “Energy Discrimination Elimination Act of 2022” in court.

The law requires the office of the state treasurer to conduct a review of investment firms to identify those that boycott investments in oil-and-gas companies regardless of the impact on investment returns. State entities cannot contract with firms on that list.

The law has been temporarily placed on hold after a judge issued a temporary injunction in response to the Walke lawsuit.

The lawsuit argues that Walke’s client, who receives a state pension, could be harmed if Oklahoma pensions do not invest in the funds targeted by the law—those that prioritize so-called “environmental, social, and governance” (ESG) policies, which divert money away from oil-and-gas production in pursuit of “green energy” and other political environmental causes.

By restricting what funds state pensions can invest in, the Walke lawsuit suggests financial returns could be lower and the long-term financial security of pension beneficiaries would be reduced.

However, a number of studies have demonstrated the opposite is true—that ESG investing policies have worse rates of return than what occurs when companies focus on growth potential.

For example, a study by UCLA and New York University found that over five years ESG funds underperformed the broader market, averaging a 6.3 percent return compared to 8.9 percent return respectively. Additionally, in comparison to other investment plans, ESG investors generally end up paying higher costs for worse performance.

State officials have vowed to continue defending the “Energy Discrimination Elimination Act” as the case continues in court.

Oklahoma Bar Association President Miles Pringle recently announced that Walke will play a significant role in determining the OBA’s future, announcing that the OBA has “reorganized the OBA Technology Committee and appointed Collin Walke as chair to review what the OBA does today and recommend a future direction for the organization.”

Walke was among the most liberal members of the Oklahoma Legislature during his time in office, based on independent evaluations.

The OBA itself has a strong Democratic tilt as an organization.

Of the 17 members of the Oklahoma Bar Association’s board of governors, public records indicate that nine have been campaign donors to Democratic candidates, including Pringle, who has been a campaign funder for Democratic candidates that include President Joe Biden, former Democratic gubernatorial candidate Drew Edmondson, and Democratic caucus leaders in both the state House and Senate.

The OBA also has significant control over who can be appointed a judge on Oklahoma’s major courts.

Under the current judicial-selection process mandated in Oklahoma, a governor cannot select his own judicial nominees based on merit. Instead, the 15-member Judicial Nominating Commission (JNC) controls judicial appointments.

Of the 15 members of the Oklahoma Judicial Nominating Commission, internal membership elections of the Oklahoma Bar Association select six JNC members. No other attorneys are allowed to serve.

Public records show that 22 of the 32 individuals appointed to the JNC by the Oklahoma Bar Association from 2000 to today (nearly 69 percent) have directed most of their campaign donations to Democrats, including to presidential candidates such as Barack Obama and Hillary Clinton. Only one bar appointee to the JNC since 2000 overwhelmingly donated to Republican candidates.

If Walke’s lawsuit succeeds and financial firms face no consequences for choking off oil-and-gas companies’ access to loans, the negative impact on Oklahoma’s broader economy could be significant.

According to the Oklahoma Energy Resources Board, the total economic impact of oil and gas and component industries in the state in 2022 was $64.9 billion, or 27 percent of the state’s total economic activity.