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(Bloomberg) — In a glitzy hotel in Houston on Tuesday morning, a key antagonist in Texas’ war against BlackRock Inc. flattered Larry Fink, declaring him to be the “king of Wall Street.”

Surrounded by energy-industry executives and money managers, Texas Lieutenant Governor Dan Patrick took the stage with Fink, marking an unexpected alliance between one of the fastest growing US states and the world’s largest asset manager after Republicans there have made more than two years of pointed jabs at the company’s sustainability efforts.

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Patrick has previously accused BlackRock of “capriciously” discriminating against the oil and natural gas industry, and the firm sits on the state’s blacklist of financial companies it has restricted business ties to. 

But on Tuesday, the second-highest ranking Texas official praised Fink at a summit focused on shoring up the state’s fragile power grid in desperate need of investment. The event was hosted at the Houstonian Hotel, Club & Spa. 

Patrick opened the event with a speech mentioning that he and Fink initially met to discuss Texas’s legislation targeting BlackRock for its energy policies, saying the two had a “little disagreement” on some issues. He joked that Fink may have been expecting a “fire breathing conservative” wearing a cowboy hat, and Fink shook his head on stage.

“I don’t know what I expected from the king of Wall Street, but we kind of hit it off immediately,” the lieutenant governor said. 

Patrick said he told Fink he could help the state given that “we need more dispatchable power as soon as we can get it.”

Texas helped make BlackRock public enemy No. 1 among Republicans across the US who sought to make environmental, social and governance, or ESG, investing part of their political culture wars. But Texas’ electric grid is so vulnerable that Patrick is showing more willingness to work with BlackRock — a top infrastructure financier — to induce investment to shore it up. 

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“BlackRock has been a big investor in the fossil fuel industry, but it wasn’t the perception,” Patrick said at the summit. He spoke to investor attendees who wield about $2.2 trillion.

And after being targeted by GOP politicians for championing environmental, social and governance investing, Fink has changed his rhetoric. Last year he said he had stopped using the ESG label because it’s become too politicized.

Fink, for his part, thanked Patrick in a short speech at the event, saying the two had an “inspirational” conversation and also talked about their differences on some issues. 

“As a business leader and and a leader of government, we saw that those differences can be minimized quite, quite quickly,” Fink said. “And that there was a lot of commonality and a lot of same interests. And the same interest was how to build a stronger future for Texas.”

Similarly, Fink said he had spoken with the governor of Hawaii on how to help rebuild from wildfires. 

Struggling Grid

The Texas grid is still reeling from the aftermath of a devastating winter storm three years ago when failures in power and gas infrastructure left millions in the dark for days and frigid conditions killed more than 200 people. Texans will be paying off the power bills from that storm for at least two decades and are expected to see higher bills as new reforms are implemented to avoid another deadly fallout.

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Such adjustments have raised payouts to power-plant owners, specifically with the aim to draw new investments in gas generation. In November, voters in Texas approved a plan to launch a $5 billion state fund to provide low-interest loans and grants needed to build back-up energy supply. 

Patrick has prioritized the importance of so-called dispatchable generation — mainly gas-fired plants that can be physically turned on at command and quickly ramp up to supplement renewable energy sources like wind and solar.

A who’s who in Texas attended the event, including Republican state lawmakers and Houston Mayor John Whitmire, who urged private sector investment in the power grid.

Boycott Label 

In 2021, Patrick, who plays a powerful role in the state legislature, was a key backer of legislation requiring state pension funds to divest from companies that Texas deemed hostile to the fossil-fuel industry. The following year, he requested that Comptroller Glenn Hegar put BlackRock at the “top of the list” of offenders. The state’s list of companies that “boycott” fossil fuels is developed by the state comptroller.

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Since that law went into effect, other Republican-led states have followed with similar bills targeting BlackRock and other money-management firms. State treasurers in West Virginia and Oklahoma, for example, have put BlackRock on a list of companies they consider to be boycotting the oil industry. 

After the inclusion on Texas’ blacklist, Patrick and Fink met twice. The second meeting was the “catalyst” for Tuesday’s event, Patrick’s office said in a Jan. 29 statement. He reiterated that his stance on ESG had not changed.

BlackRock has always maintained it does not engage in any boycott. The company has $125 billion invested in Texas-based public energy companies on behalf of clients. 

Read More: Red, Blue and BlackRock: Larry Fink Navigates a Divided America

In a press conference after their opening remarks, Patrick didn’t directly answer a reporter’s question on whether Texas would remove BlackRock from the state’s blacklist. 

Patrick said he thinks the list has caused companies to be more willing to have conversations about their energy policies and make changes. “I’m going to be very polite to the media,” he said. “Don’t make this about BlackRock, the blacklist in Texas.” 

He pointed to Tuesday’s conference and said BlackRock and the state “hope to work together in the future.”

—With assistance from Silla Brush, Nic Querolo, Danielle Moran and Sam Hall.

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