No one can accuse the University of Denver of slighting a request by students to consider in the university’s $607 million endowment. But now that a task force to examine the issue has held multiple hearings and taken testimony from a range of experts and advocates, itap time for university trustees to deliver their verdict in no uncertain terms.
Divestment would be hypocritical and divisive. It would amount to rank moral posturing. It would — and the people who work in it — that remains critical to civilization and whose byproducts are used every hour of every day by nearly every one of us.
Fortunately, itap likely the board of trustees’ three-member task force, which will report to the full board on Jan. 20, understands this after seven meetings over the summer and fall. Task force members Jim Griesemer, Catherine Shopneck, and Craig Harrison were unfailingly polite and respectful of all who appeared before them, but the shallow and misleading testimony by activists from 350.org, which is spearheading the divestment movement on college campuses, cannot have escaped their notice.
The fatal conceit of divestment activists is their insistence that they have special insight into the future of energy companies that professional investment managers have missed. They argue that these companies will be stuck with huge reserves of “stranded assets” as society accelerates the transition into clean energy, and that investors who dump these stocks now will be rewarded later.
To buttress their case, they cherrypick statistics, misrepresent the political and technological obstacles to a full transition to carbon-free energy, and recite obvious investment risks as if they were a revelation.
Did you know that the energy industry “can be economically volatile,” for example, and that “during the downturns people can lose their jobs”? Yes, really. This news flash was provided by Michaela Mujica-Steiner, statewide organizer for 350 Action, an affiliate of 350.org. She also broke the scoop that lots of fossil fuel reserves exist in politically volatile regions, among other nuggets of common knowledge.
When asked by a task force member whether the business cycle for fossil fuels was any worse than for other industries, however, she was at a loss. “It may not be that different from some other industries,” she said, adding “I’ll admit I don’t know as much about other industries . . . “
Brett Fleishman, 350.org’s senior global analyst, was a good deal more polished if no more convincing. He tried to pass off five years of subpar market performance for energy companies through 2015 as reason for divestment – a period conveniently coinciding with the price decline in oil and gas thanks to the shale revolution. Shopneck rightly objected to this timeline, noting that a longer horizon revealed no such divergence in returns.
Not helping Fleishman’s case is the fact that energy stocks surged 25 percent in 2016, leading the late-year rally.
To be sure, divestment might still make sense for moral reasons if the use of fossil fuels were optional and the only things holding us back from a swift, total transition to renewable energy were political cowardice, corporate clout, subsidies and corruption. This is the fiction peddled by divestment activists. At one point Fleishman even suggested fossil fuel dominance is the result of government subsidies when in fact subsidies for renewables are much larger per unit of energy produced, as by the U.S. Energy Information Administration and other agencies have documented.
Modern society will rely upon some level of fossil fuels for decades even if nations take seriously their commitments under the Paris climate accord. DU’s trustees should acknowledge the wisdom of Professor Frank Laird, who reminded the task force of the incredible complexity of the energy use undergirding civilization. “Changing a system like that is a work of a lifetime and then some,” he declared. “There are no shortcuts.”
Laird, whose research specialty at DU is renewable energy, noted the divestment movement promotes “a causal narrative with heroes , villains, victims and a causal mechanism. My argument about the divestment movement is that the narrative is wrong. It gets a set of categories wrong. It gets causation wrong. And itap not merely ineffective but I think it can have a negative effect on decarbonizing the energy system because frankly itap a distraction from a set of large and complex tasks.”
Perhaps the most offensive aspect of the divestment crusade is its attempt to equate energy companies and those who work for them with the perpetrators of apartheid and Jim Crow, as well as the tobacco industry — all of which were mentioned at the hearings. But should we really “stigmatize” – a favorite word of the movement – those who provide the fuel that kept us from freezing during last week’s single-digit temperatures?
“You can’t live in modern society without consuming fossil fuels,” Laird observed.
By all means, letap proceed on a measured march into a cleaner-energy future. But letap also drop the morality tale so dear to the divestment movement. It happens to be untrue.
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