Liberal Media Thumps Chest Over Oil Divestment, Despite Flailing Movement

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Chris White Tech Reporter
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Left wing media and oil divesters continue to champion fossil fuel divestment even as the movement is relegated to pointing at a series of mostly Pyrrhic victories to justify its existence.

The Daily Kos, a liberal blog that generally supports anti-fossil fuel crusades, suggested Tuesday the fossil fuel industry is worried it is losing the battle to defeat divestment. In fact, the blog suggested the industry is at such desperate straights that it’s currently going through several stages of grief: “denial about the potential success of the campaign, then anger, and now bargaining.”

The website used a handful of examples to bolster the claim that divestment is unavoidable. Most of the examples were of schools using what is now called the Syracuse model of divestment – wherein institutions divest only direct fossil fuel holdings, not oil assets tied to commingled mutual funds.

The University of Maryland, for instance (which the Daily Kos referenced), decided in June to sell off $70 million in direct fossil fuel assets from its massive $1 billion endowment. The number is paltry, especially when considering the school has no direct investments in coal, tar sands or any companies on the Carbon Underground 200 list, according to the university’s newspaper.

The school is giving up essentially no direct fossil fuel holdings while, at the same time, maintaining more than $70 million of fossil fuel investments in co-mingled funds – funds not impacted by the announcement.

Critics of divestment have “good reason” to be concerned, after all “the list of divesting institutions has grown to encompass a total value of $3.4 trillion dollars and numerous high-profile divesters,” the author adds.

The website was no doubt using environmentalist Bill McKibben’s group’s recent statistics showing that 500 institutions representing over $3.4 trillion in assets have pledged, in some form, to purge oil assets.

Yet, critics aren’t buying the number. They believe the group’s numbers are wildly inflated.

Forbes suggested in December that divesting institutions have sold off, at most, $125 billion. Additionally, that $3.4 trillion number is likely the total number of assets held by those institutions, not the actual number of fossil fuel divested assets.

Still, the blog noted that divestment makes sense from an economic perspective, as it allows schools and public institutions to avoid the fossil fuel industry’s supposedly sinking ship.

The outlet used a 2016 analysis by Corporate Knights, a “magazine for clean capitalism,” which found New York’s public pension would have secured an extra $5.3 billion had it divested in 2012. Analysts argue, however, that Corporate Knights’ analysis is incomplete, as its conclusion is based on a decade of low oil prices as opposed to future fossil fuel stock.

Other fossil fuel divestment crusaders have made similar comments, including Cornell University trustee Joe Rowland.

“Today the question to be answered is not why should Cornell … divest from companies holding fossil fuel reserves, but why not?” Rowland wrote in a University Assembly resolution. “You don’t have to be a weatherman to know which way the wind is blowing,” he added. Rowland wants the university to fully divest from oil by 2035.

He called studies showing divestment as costly pure “twaddle.”

Rowland was referencing a study by Hendrik Bessembinder, a professor or finance at Arizona State University, who published a study in May estimating that Cornell’s endowment risks being wallowed out by $120.75 million or $724.5 million over the next ten decades, due in large part to the frictional costs associated to divestment.

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