Tags: Climate Change | Divest-Invest | fossil fuels | energy | investments | climate change

Daily Signal: Anti-Fossil Fuels Campaign Risks Economic 'Chaos'

By    |   Friday, 02 Jan 2015 08:47 AM

The Divest-Invest movement, a climate change crusade that is encouraging institutional investors to dump their shares in fossil-fuel companies and reinvest in a "clean-energy economy," could heavily damage the fuel industry by stigmatizing it, a Daily Signal commentary says.

Over the past two years, institutions such as universities, pension funds and more have been divesting their stock in fossil fuel companies as part of the movement's goal to "destroy petroleum and coal companies," writes columnist Ron Arthur in an op-ed piece Friday.

In September, the "Divest-Invest Global Movement" delivered pledges  to the U.N. Climate Summit from 50 philanthropic foundations and more than 700 institutions and individuals with plans to divest more than $50 billion.

While Bloomberg analysts have said there is not much of a chance the movement will be able to stop nearly $5 trillion in oil and gas equities, the coal industry may not fare as well, Arnold said.

Further, according to Oxford University's "Stranded Assets" study, "stigma can produce negative consequences for an organization," and with movements such as Divest-Invest, firms can be "barred from competing for public tenders, acquiring licenses or property rights for business expansion, or be weakened in negotiations with suppliers," resulting in the loss of contracts and mergers.

Fossil-fuel alternatives are not available for everything, Arnold points out, and if stigmatization and restrictions bring down the oil and gas industry, there will be a "jolting overnight panic."

"What shall we do with America’s 254.4 million registered fossil-fueled passenger vehicles?" asked Arnold. "Junk them? Convert them to biofuels or electric batteries or hydrogen? Force everyone to buy new?"

Further, he said, the country would not be able to fuel the trucks that deliver more than 70 percent of all freight, including food, which would leave the nation's grocery shelves bare.

"What will fuel our 39,000 merchant ships?" he said. "What about the estimated 40,000 ships of other nations? Go nuclear? The technology exists, but it’s not clear that we have the uranium and shipyard capacity for some 80,000 retrofits or new builds."

Rail freight also would be stopped, unless it can be fueled by hydrogen, and while there have been some experimental test locomotives, "none of these Hindenburg-on-rails experiments have exploded yet."

There also would be no fuel for jetliners, and while the aircraft biofuel industry has plans for cutting carbon dioxide emissions in half by 2050, there are still no plans for zero-emission jet fuel.

"Without transportation fuel, modern civilization would collapse into an unimaginably horrendous chaos," said Arnold.

It's not just transportation that depends on fossil fuels, as plastics, lubricants, asphalt, soap and more than 6,000 other products also depend on petroleum, Arnold pointed out.

The Divest-Invest movement is not a group of foundations, like is found in most grant-based organizations. It is traced to the Washington-based Wallace Global Fund II, which in 2012 had about $115 million in assets, he said.

The money originally came from the 1920s-era Hi-Bred Corn Co., owned by Henry Wallace, who was secretary of agriculture, secretary of commerce, and then vice president under President Franklin D. Roosevelt.

His heirs, co-chairmen Scott and Randall Wallace, treasurer Christy Wallace, and executive director Ellen Dorsey, decided to divest the securities in coal, and eventually through the years starting giving cooperating groups grants to do the same, expanding into all fossil fuels.

"The divestment campaign is pure political theater designed to draw attention around fringe anti-fossil-fuel efforts leading up to the U.N. Climate Conference in France in 2015," Matt Dempsey, of Oil Sands Fact Check, told The Daily Signal.

"No wonder leading academic voices on campuses across the country are rejecting this extreme campaign that would significantly cut student resources while doing nothing to improve the environment."

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The Divest-Invest movement, a climate change crusade that is encouraging institutional investors to dump their shares in fossil-fuel companies and reinvest in a "clean-energy economy," could heavily damage the fuel industry by stigmatizing it, a Daily Signal commentary says.
Divest-Invest, fossil fuels, energy, investments, climate change
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2015-47-02
Friday, 02 Jan 2015 08:47 AM
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