“That’s not just numbers on a spreadsheet; it’s a direct threat to coal companies’ ability to raise capital, finance infrastructure, and support jobs.”
— Former Texas Governor and U.S. Energy Secretary Rick Perry.
WASHINGTON, D.C. (Texas Insider Report) — Texas reached a nearly $30 million settlement with Vanguard Group to resolve allegations that the firm coordinated with other large asset managers to pressure coal producers on environmental goals. That partially closes one chapter in an ongoing legal proceeding, but whether it delivers lasting impact remains uncertain.
The case stems from a November 2024 antitrust lawsuit filed by a coalition of states against targeting BlackRock, Vanguard, and State Street. The complaint alleged the firms used their combined influence as major shareholders to artificially constrict coal production and manipulate markets in service of green agendas.
The lawsuit, which survived an early motion to dismiss, allowing the proceeding to move forward.
But skeptics are raising questions about both the theory and practical effects of the suit in the first place.
Energy analyst Wayne Winegarden, writing in Forbes, argued that broader market dynamics – not coordinated investor pressure – offer a more straightforward explanation for coal’s decline. As Winegarden noted, “The lawsuit fails to account for fundamental market changes created by the fracking revolution. This market-driven innovation increased the supply – and subsequently drove down the costs – of natural gas.”
Federal data backs that up. According to the U.S. Energy Information Administration (EIA), coal production peaked in 2008 and has steadily declined since, driven by economics, regulations, and competition – not conspiracy.
Winegarden and others also warn that the lawsuit’s original aims could backfire. Forcing large asset managers to divest from coal holdings doesn’t revive the industry – it risks starving it of capital. “In practice,” Winegarden warned, “the AG actions will simply restrict the coal industry’s ability to raise capital,” potentially undermining its long-term viability.
The concerns have found an audience in Washington and among Trump Administration energy officials. “If successful, this lawsuit could force an estimated $18 billion in coal-related holdings off the books of these major asset managers,” warned former Texas Governor and U.S. Energy Secretary Rick Perry.
“That’s not just numbers on a spreadsheet; it’s a direct threat to coal companies’ ability to raise capital, finance infrastructure, and support jobs.”
At a National Coal Council meeting earlier this year, U.S. Energy Secretary Chris Wright struck a similar note.
“Start with the list of losers,” said Secretary Wright, emphasizing that “everyone” would suffer from a “movement to drive capital out of the hydrocarbon business.”
At the same meeting, U.S. Interior Secretary Doug Burgum echoed that “everybody who pays an electric bill” would feel the consequences.
That raises a more uncomfortable question: is Texas defending coal – or playing politics with it? Coal still matters in the Lone Star State, but it’s hardly booming. Texas produced about 12.3 million short tons of coal in 2024, down from more than 17 million just two years earlier. And coal accounts for just over 10% of Texas’ electricity capacity – a shrinking share in a state dominated by natural gas and expanding renewables.
That reality complicates the narrative. If market forces – not ESG – are driving coal’s decline, these legal fights may do little to reverse it. Restricting institutional access to coal holdings could compound the industry’s financing challenges rather than resolve them.
In other words, Texas may be swinging at Wall Street – but it’s not clear the coal industry, and consumers more broadly, aren’t taking a hit in the process.
For now, the Vanguard settlement avoids the most disruptive outcome.
Notably, Vanguard’s settlement does not require divestment from coal – once viewed as a central objective of the lawsuit. The Wall Street Journal confirmed the firm “didn’t agree to take that step,” suggesting this outcome is more symbolic than structural. In a statement, a Vanguard spokesperson said the company resolved the case to avoid “the burden and expense of litigation.” Translated: write the check, move on, admit nothing.
With lawsuits against BlackRock and State Street still unresolved, this settlement is hardly a turning point – it’s just the first round with the legal proceedings remaining at an early stage.
If this fight ends up hurting the very industry it claims to protect, that’s not a victory – it’s a misfire. And Texas workers and consumers will be the ones left footing the bill.
