“The reality is the Biden administration is not standing in the way of increasing domestic oil production to meet today’s energy needs,” Deputy Energy Secretary David Turk asserted at the World Petroleum Congress in Houston last week. Really? He might want to check with John Kerry.

The president’s climate envoy has been pressuring banks and financial institutions to reduce their commitments to U.S. oil and gas companies and join the Net-Zero Banking Alliance, which would hobble the ability of oil and gas companies to increase production. Citi, Wells Fargo, Bank of America, Morgan Stanley, Goldman Sachs, and JPMorgan Chase signed on to the alliance this year.

Mr. Kerry’s efforts didn’t go unnoticed. In April, members of the Senate Banking Committee sent him a letter expressing concern that he had “been pressuring banks to make extralegal commitments regarding energy-related lending and investment activities” that would result in “higher energy costs for American consumers.”

In May, 15 state treasurers sent a letter to Mr. Kerry observing that he and other members of the Biden administration are “privately pressuring U.S. banks and financial institutions to refuse to lend to or invest in coal, oil, and natural gas companies, as part of a misguided strategy to eliminate the fossil fuel industry in our country.” They urged banks and financial institutions “not to give in to pressure from the Biden Administration.”

It will take more than letters to halt the Biden administration’s war on fossil fuels. Responding to the Dallas Fed Energy Survey for the third quarter, one oil-and-gas producer identified “expanding credit” as a major headwind because “the money center banks continue to seek to reduce their commitments to oil and gas borrowers.”

On Nov. 22, another group of 16 state financial officers signed an open letter to the U.S. banking industry with some teeth. The letter states that the signers will take “concrete steps” to “select financial institutions that support a free market and are not engaged in harmful fossil fuel industry boycotts for our states’ financial services contracts.” If these officials follow through, noncompliant banks would lose lucrative state contracts. According to the letter, these officials are responsible for a combined total of more than $600 billion in assets.

Texas went a step further in June, enacting a law banning state investments in businesses that boycott oil and gas companies and another law that blocks state investments in companies that restrict business with the firearms industry. Since the laws took effect, two of Wall Street’s biggest municipal-bond underwriters—Bank of America and JPMorgan Chase—haven’t managed a single municipal-bond sale in Texas, the second-largest issuer of state and local government debt with some $58 billion sold last year.

The antiboycott approach is a good start, but it fails to address a significant threat. Under the Texas law, state agencies can still do business with financial firms such as BlackRock, Vanguard and State Street that advocate transforming our economy to net-zero carbon emissions by 2050 because they own—rather than boycott—oil-company stocks.

That is a problem. Exxon Mobil is the largest energy company in Texas. Climate activist hedge fund Engine No. 1 recently waged a proxy war to put insurgent directors on Exxon’s board. Reuters described it as “the first major shareholder contest to make climate change the leading issue for choosing directors.” Engine No. 1 gained the support of BlackRock, Vanguard and State Street Global Advisors, which voted their combined 21% of Exxon’s shares in favor of two insurgent directors who won election to Exxon’s board. BlackRock supported a third insurgent who was also elected.

The Employees Retirement System of Texas and the Teacher Retirement System of Texas also voted in favor of the three successful insurgent director nominees and a shareholder proposal requiring a report on corporate climate lobbying aligned with the Paris agreement, which passed.

Engine No. 1’s proxy fight was about altering Exxon’s business model away from oil and gas production. By October Exxon’s board was debating whether to continue some major projects despite the world’s oil shortage and rising prices.

A more comprehensive state legislative solution might have produced a different result. The Texas law could have included a provision placing the voting rights for shares purchased by Texas entities, or the financial advisers those entities employ, under a committee that includes individuals answerable to Texas voters, rather than climate-change activists.

The Biden administration will pursue its nonstop war against America’s oil and gas producers for at least the next three years. Unless it meets resistance, prices will increase and the U.S. energy industry will continue to shrink. While state legislatures can’t stop Mr. Biden from pursuing his agenda, they can discourage the financial sector and institutional investors from supporting it.