Relatively inexpensive and increasingly cleaner burning fossil fuels have been a boon to humanity for the past 150 years. Furthermore, fossil fuels have reignited nearly every sector of our economy since the Great Recession, including businesses and financial markets, and created huge opportunities for the middle class and the poor. Reuters market analyst John Kemp notes how policymakers from the president on down prefer to focus on trendy renewable technologies and “seriously underestimate the role which increasing domestic oil and gas production, especially horizontal drilling and hydraulic fracturing, have played in the economic recovery.”
In another trendy move, environmentalist shareholder activists are pressuring energy companies in which they invest to scale back in part or completely their interests in oil, gas, and coal. For example, Danielle Fugere, president and chief counsel at the As You Sow religious shareholder activist outfit, told The Guardian last month that “market fundamentals” are changing. “We see a whole number of factors moving markets away from fossil fuels – pollution, technology changes, efficiency increases, competition from low-cost renewables,” she said. “We’re seeing the market changing – the world is moving to cleaner resources, and these energy companies have to move with the market or they’ll get replaced.”
This writer begs to differ, noting that fossil fuels in the developing world are driving the availability of electricity, sanitation, clean drinking water, and refrigeration. Yet the leftist anti-fossil fuel movement – shamefully so for those of a so-called religious bent – continue to apply pressure. Some go so far as to recommend shareholder divestment from producers of coal, natural gas, and crude oil, proclaiming their efforts morally similar to the nominally successful divestment movement against apartheid in South Africa in the 1980s.
There is no coherent comparison between oil-company divestment currently advocated by progressive shareholders and the morally serious goal of ending apartheid. Yet thousands of so-called religious investors affiliated with such fund- and asset-management groups have signed on to the fossil fuel divestment campaign. Not only are environmental activists encouraging university pension funds to divest from fossil fuel companies, but shareholders are pressing the industry to shut down their rigs and shutter their mines to leave all unextracted fossil fuels untouched and underground.
For example, Rev. Jim Antal, responsible for the 375 United Church of Christ congregations in Massachusetts, is quoted on the Green America website: “The reason [fossil fuel companies] are profitable is because they’re destroying the earth. That’s what the church needs to be shouting. … It’s real simple. They’re making a profit, because we are letting them destroy God’s creation.” Antal goes on to celebrate divestment from fossil fuels as an inherent moral good: “When people call on their pension funds or schools to divest, they are not only pressuring the institution to change. They are forcing the leaders of the institution and the members of the board to grapple with a moral question.”
Where, in Rev. Antal’s reasoning, do we see concern for the real needs of developing countries struggling to lift their people out of dire poverty and furnish them with living standards that, compared to what we enjoy in the West, are barely adequate? No one questions that we all are called – Divinely and otherwise – to conduct ourselves as good stewards of our Earth. It is that same charitable imperative that also calls us to endeavor in the best interests of the least among us.
Let us not forget hundreds of thousands of industry jobs created, which pay comparatively high wages, offer generous benefits, and have provided working poor and minorities an entry point to the middle class. Mark Green of the American Petroleum Institute noted: “Because domestic energy is more abundant, Americans have renewed mobility – literally, in the form of cheaper gasoline … because of oil and natural gas industry-supported job creation and investment, and a manufacturing renaissance spurred by affordable fuels and feedstocks.” The Wall Street Journal reported last month that a 60-cent drop in the price of a gallon of gas results in an economic benefit equivalent to a tax cut between $100 billion and $125 billion. Economists at Moody’s Analytics estimate U.S. consumers recognize a savings of $1 billion annually for each penny the price of gasoline is reduced.
Patrick Holland, writing for The Manhattan Institute’s Economics21, reports campus divestment activity for fossil fuels – if successful – would have serious repercussions. For example, Holland explains: “Swarthmore College, the birthplace of the divestment movement, has released a study showing that if the school were to divest, it would lose between $20 million and $26 million of revenue from its endowment every year over the next 10 years.” He continues that Wellesley College’s average losses over a 10-year period would be $21 million, and that Pomona College would see $6.6 million annual losses.
Leaving oil, natural gas, and coal in the ground in the interest of protecting the planet sounds wonderful on the surface but ignores some facts. First is our already achieved reduction of greenhouse-gas emissions below the levels of 20 years ago. This decrease isn’t a result of government mandates for renewable fuels, international treaties, or pressure from the Environmental Protection Agency but rather from cleaner burning natural gas. Speaking of the EPA, the agency recently reported that methane emissions from hydraulic fracturing dropped 73 percent over the past three years.
Ask those in the developing world, whether they’re witnessing tremendous benefits from affordable and plentiful electricity produced by coal, oil and natural gas power generation, and you’ll more than likely hear a resounding affirmative (an estimated seven million people worldwide suffer premature death annually from indoor air pollution through the use of wood, coal, or dung as a primary cooking fuel). The fossil fuels divestment movement would callously leave these millions to their tragic fate.
