The U.S. Department of Labor is concerned that America’s pension fund managers don’t know what they’re doing.

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That’s the rationale, at least, for the department’s newly proposed rule restricting the use of environmental, social, and governance considerations in investment decision-making. The language reaffirms the standard interpretation of fiduciary guidelines that only financial risks and returns can be considered in the management of U.S. employer-provided pension funds; “non-pecuniary goals,” for example relating to political or public policy, should not guide pension investments.

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The move has been widely interpreted as an attempt by the pro-fossil fuel Trump administration to shore up support for an industry that’s rapidly losing popularity with investors. The timing is ironic, coming as the fossil fuel industry begins to confront existential questions about its near-term future. It would almost be amusing if it wasn’t for the fear, uncertainty, and doubt the proposal leaves in its wake. Before the pandemic, investors were already growing wary of fossil fuels.

Thermal coal’s part in global capital markets has shrunk dramatically, and even the ample dividends paid by Big Oil were coming under pressure as growth opportunities seemed far from guaranteed. Covid-19 accelerated the challenges faced by the oil industry, shutting down some key sources of demand growth such as aviation and shipping.

Advances in fuel efficiency, renewable energy technology, and energy storage have continued apace. Markets tend to be forward-looking. So as doubts grow about the prospects for fossil fuels, financing becomes more difficult and more expensive to obtain. This situation naturally alarms the industry’s supporters. In April, for example, 17 Republican senators wrote to Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin to ask that fossil fuel companies’ debt not be excluded from the Fed’s asset purchasing programs designed to shore up the economy in the middle of the pandemic.

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