Wyoming, along with 10 other states, has filed a lawsuit against three major investment firms—BlackRock Inc., State Street Corp., and Vanguard Group Inc.—accusing them of using their influence to undermine the coal industry in pursuit of net-zero carbon emissions goals, Cowboy State Daily reports.
The lawsuit claims that the firms’ actions have driven up energy costs and diminished competition in the coal market.
The suit, led by Texas Attorney General Ken Paxton and filed in the US District Court for the Eastern District of Texas, alleges that the three firms colluded to reduce coal production by acquiring substantial stakes in major coal companies and leveraging their shares to pressure these companies to cut output. Wyoming Governor Mark Gordon emphasized that the firms’ adherence to environmental, social, and governance (ESG) policies has negatively impacted coal production, driving up energy prices for American consumers.
“Under the guise of ESG policies, these investors have constrained coal supply, diminished competition, and generated extraordinary profits,” Gordon said in a statement.
The investors collectively hold significant shares in major coal producers, including 30.43% of Peabody Energy and 34.19% of Arch Resources, the largest publicly traded coal companies in the US. The lawsuit argues that their influence has allowed them to implement policies that reduced coal output, which has in turn increased energy prices and generated substantial profits for the asset managers.
The complaint highlights that from 2019 to 2022, Peabody Energy’s production fell by 25.5%, while its profits increased by 853.9%. Similarly, Arch Resources’ production dropped by 11.7%, but its profits rose by 469.2%.
The lawsuit accuses the investors of violating antitrust laws by artificially constraining coal supply. It likens their actions to those of a “cartel,” a term used multiple times in the complaint. The states are seeking damages, civil penalties, and an injunction to prevent the investors from continuing to use their influence to limit coal production.
The complaint places particular emphasis on Wyoming’s South Powder River Basin, known for its thick, accessible coal beds and low-sulfur content, which make it both economically and environmentally preferable to other coal sources. The lawsuit argues that the firms’ actions have created a monopolistic environment where coal prices can be manipulated due to the high costs associated with building new coal-burning plants.
The lawsuit also points out that renewable energy sources, such as solar and wind, cannot provide the same reliable, continuous power that coal-fired plants offer, making coal a vital part of the energy mix.
The lawsuit reflects a growing backlash against ESG investing, which critics argue prioritizes environmental and social goals at the expense of traditional energy sectors. Wyoming, a major coal producer, has been vocal in defending its coal industry amid global efforts to reduce carbon emissions.
