Oil, natural gas still critical to nation's energy needs

Oil and natural gas production is surging in New Mexico and nationally. But there’s a hidden danger lurking in the shadows: divestment.

Over the past decade, critics of the petroleum industry have mounted a “keep-it-in-the-ground” campaign as a way of demonstrating their concern with climate change. But the campaign, which began in New England, has evolved into a national movement.

Its leaders like Sen. Bernie Sanders of Vermont and environmentalist Bill McKibben are urging corporations, universities, foundations, and faith-based institutions to divest their stocks in oil and natural gas companies.

That the campaign is leaving an imprint is undeniable, though it smacks of hypocrisy.

Recently, New York City Mayor Bill de Blasio, who has a fleet of SUVs, announced that $5 billion of the city’s pension funds would be withdrawn from the fossil fuel industry. And he said the city is seeking to collect billions of dollars in flood damages linked to climate change from five major oil companies — Exxon Mobil, Chevron, Shell, BP, and Conoco Phillips.

San Francisco, Oakland and Berkeley have divested their investments in fossil fuels, as have several California counties.

A few years ago, the Rockefeller Brothers Fund announced it would sell all its funds in oil and gas companies.

To date, nearly 700 institutions worth $2.6 trillion in assets worldwide have pledged to divest from fossil fuel companies.

Singling out for assault one of America’s most essential industries — an industry critical to job creation, affordable energy and our economic well-being — is the kind of misguided thinking we can’t afford.

Those with all-renewables agendas who want to prohibit the production of fossil fuels are either dangerously ignorant of the importance of fossil fuels to the U.S. economy, or are so blinded by the climate crusade they don’t care that the attempt to drive a stake into the industry is essentially an attack on our standard of living.

Oil and gas supply 60 percent of the nation’s energy, and the U.S. Energy Information Administration forecasts they will still account for that share in 2040.

In contrast, solar and wind combined, even with tax credits and state mandates for renewables, account for only 3.2 percent of the nation’s energy supply, a tiny share, something that the divestment campaign conveniently ignores.

Increased use of renewables is going to take time, and it’s going to require the use of natural gas as a backup fuel. Ironically, thanks largely to the shale revolution, the U.S. leads the world in the reduction of carbon dioxide emissions, which are currently at mid-1990s levels.

Carbon-mitigation technologies for use in turning power-plant emissions into petrochemicals and plastics are on the horizon and they could make a positive difference in the U.S. and globally.

Divestment, on the other hand, is ineffective, costly for universities that lose some of their endowment, might not even lead to less greenhouse-gas emissions, and amounts to naïve moralism.

Philanthropist Bill Gates called divestment one of the “false solutions” to environmental problems.

It is doubtful divestment will adversely affect fossil fuel companies, since stocks sold by one investor will be bought by another who doesn’t agree with divestment. So for all practical purposes, a switch in investors won’t cause any loss of investment and the company won’t notice the change.

But divestment shouldn’t be shrugged off. It could have a political impact, as happened some years ago when another divestment campaign helped bring an end to apartheid in South Africa.

And another campaign targeted the tobacco industry.

But let’s be realistic: To ensure that the U.S. can meet its energy needs will require use of fossil fuels well into the future, along with improvements in energy efficiency. Using more solar and wind will help only moderately. Oil and natural gas will need to play a central role.

Jim Constantopoulos is a geology professor at Eastern New Mexico University. Contact him at: [email protected]