There is a moral case for fossil fuels, the United States energy secretary argues
Renewable energy stocks and green investment funds have taken major hits after U.S. Energy Secretary Chris Wright made fresh promises to deliver a “180-degree pivot” on energy policy.
Speaking at the CERAWeek by S&P Global conference in Houston on Monday, Wright pledged to undo progressive energy policies implemented by Joe Biden, endorsing President Trump’s calls to expand American oil and gas production.
“I wanted to play a role in reversing what I believe has been a very poor direction in energy policy,” said Wright, a former fracking executive.
The remarks were met with applause from oil and gas executives.
Traders reacted accordingly, with a range of clean energy stocks shedding value. Notably, shares of Florida-based firm NextEra Energy (NYSE:NEE) were down more than 3.5% by Tuesday lunchtime, while Canadian firm Alongquin‘s (TSE:AQN) losses topped 3.7%. Shares of hydrogen fuel cell technology firm AFC Energy (LON:AFC) also fell by more than 3%.
ESG and renewable energy funds suffered a similar fate. Shares of the iShares ESG Aware MSCI USA Growth ETF (EGUS) took a particularly severe hit, sliding 4.15% since Monday.
There were also notable losses for the Flexshares ESG & Climate Large Cap Core Index Fund (FEUS), the Xtrackers MSCI USA Climate Action Equity ETF (USCA), and the iShares ESG Select Screened S&P 500 ETF (XVV), all of which slid by close to 3%.
U.S. recession fears loom
The losses for green investment products are part of a wider market contraction under the new U.S. administration.
Most notably, the rapidly escalating trade war with neighboring Canada is stoking fears of a recession, with Trump announcing on Tuesday that he will double tariffs on steel and aluminum imports to 50%.
I have instructed my Secretary of Commerce to add an ADDITIONAL 25% Tariff, to 50%, on all STEEL and ALUMINUM COMING INTO THE UNITED STATES FROM CANADA, ONE OF THE HIGHEST TARIFFING NATIONS ANYWHERE IN THE WORLD,” Trump wrote in a Truth Social post.
The news appeared to intensify the S&P 500’s recent losing spell, with the index falling a further 2.7% on Tuesday, officially erasing all of its post-election gains.
The Dow Jones Industrial Average also lost 350 points, equating to 0.8%.
