“To colleges, universities and pension funds, we say: Please demand and ensure open, robust debate on all these issues, before you vote on divestment. Allow no noisy disruption, walk-outs or false claims of consensus. Compel divestment advocates to defend their position, factually and respectfully. Protect the rights and aspirations of people everywhere to reliable, affordable electricity, better living standards and, improved health.”
“Social responsibility” activists have designated February 13/14 as Global Divestment Day. They want universities and other institutions to eliminate fossil fuel companies from their investment holdings. Their demand is not just unrealistic and misguided. It is irresponsible and immoral, potentially lethal–and racist in result.
Having grown up in developed countries, these activists seem to have forgotten how nasty and short life was throughout human history, until quite recently. Even a mere 200 years ago, the vast majority of people in every nation were poor, sick, and malnourished. Life expectancy in 1810 was less than 40 years, and even royal families lived under sanitation, disease and housing standards vastly inferior to what American welfare families enjoy today. Then a veritable revolution occurred in the human condition.
The world began to enjoy a bonanza in wealth, technology, living standards, and life spans. In just 200 years, world population increased eight-fold, incomes rose eleven-fold, disease rates plummeted, and life expectancy more than doubled. Unfortunately, not everyone benefitted equally, and even today billions of people still live under conditions little better than what dominated two centuries ago. Bringing them from squalor, disease and early death to modernity is perhaps the most important challenge we face today.
Many factors played important roles in this phenomenal advancement, but underlying nearly all of them were fossil fuels that provided the energy for this industrial, transportation, housing and healthcare revolution. Modern civilization is undeniably high energy – and based largely on coal, oil and natural gas.
Indeed, hydrocarbons provide over 85% of the world’s energy, supporting $70 trillion per year in global gross domestic product. Fossil fuels are energy, and energy is modern life.
Without Fossil Fuels: Brutal, Short Living
As Julian Simon, Indur Goklany, Alex Epstein and the authors of this article have documented, the relationship between fossil fuels and human betterment is positive, strong and undeniable. Hydrocarbons have driven dramatic improvements in all human and environmental indicators worldwide, including a huge decline in climate-related deaths due to storms, droughts, heat and cold.
The divestment movement’s demand – that institutions divest from and society stop using fossil fuels – would reverse this progress and jeopardize people’s health and living standards. The fossil fuel industry produces almost all of the energy we use for virtually everything we make, grow, ship, drive, eat and do. Hydrocarbon divestment and elimination would destroy the quality of life Americans take for granted.
Trains and automobiles would not run. Planes would not fly. Refrigeration, indoor plumbing, safe food and water, central heating and air conditioning, plastics and pharmaceuticals would disappear or become luxuries for wealthy elites. We would swelter in summer and freeze in winter.
We would have to get used to having electricity when it’s available, not when we need it – to operate assembly lines, conduct classes or research, and perform life-saving surgeries. Many jobs would disappear, and our living standards, health and welfare would regress toward Third World or Eighteenth Century conditions.
In what some might call poetic justice, college students, professors, administrators and divestment activists would also feel this pain – and lose their computers, the Internet, Google, smart phones, tablets, PowerPoints, iPads, and “essential” social media of email, Facebook, Snapchat, Skype and Twitter.
Divestment: Financially Imprudent
Divesting a fossil fuels portfolio is also financially imprudent. Fossil-fuel stocks have provided good returns in institutional and university investment portfolios; they are among the best for solid, risk-adjusted returns. One analysis found that a 2.1% share in fossil fuel companies in 2010–2011 by colleges and universities generated 5.7% of all endowment gains, to fund scholarship, building and other programs.
School teacher, public safety worker and other retirement funds have experienced similar results. In the top five state pension funds operating in 17 states, fossil company shares significantly outperformed other investments. Tufts University determined that divesting its endowment of fossil fuel companies would result in a loss of at least $75 million over the next five years.
Perhaps that is why these institutions often choose to divest slowly, over five or ten years: they want to maximize their profits. One is reminded of St. Augustine of Hippo’s prayer: “Please let me be chaste and celibate – but not yet.” The “ethical” institutions also need to find buyers who are willing to stand up to divestment pressure group insults and harassment. They also need to deal with hard realities.
No scalable alternative fuels currently exist to replace fossil fuels. To avoid the economic, social, environmental and human health catastrophes that would follow the elimination of hydrocarbons, we would need affordable, reliable options on a big enough scale to replace the fuels we rely on today. The divestment movement ignores the enormity of current and future global energy needs (met and unmet), and fails to understand that existing “renewable” technologies cannot possibly meet those requirements.
Energy-Intensive Fossil Fuels Improve Lives
Fossil fuels produce far more energy per acre than biofuels possibly can, notes analyst Howard Hayden. Using biomass – instead of coal or natural gas – to generate electricity for one U.S. city of 700,000 people would require cutting down 1,000 square miles of trees (an area the size of Rhode Island) every year.
Similarly, we are already planting corn across an area the size of Iowa to produce ethanol for E10 gasoline. Providing all-ethanol fuel for the same vehicles would require planting IA, IL, IN, KS, MI, MN, SD, ND and WI in corn – instead of devoting it to food crops and wildlife habitat
Wind, solar, biomass, hydroelectric and geothermal energy currently comprise less than 15% of world energy, and wind and solar provide just 3% of global consumption, the U.S. Energy Information Administration predicts. By 2040, as the world’s population continues to grow, global energy demand will increase 35% and renewables will still represent only 15% of the total. Not to use fossil fuels is tantamount to not using energy, which is economic suicide – and eco-manslaughter.
Electrification was voted the world’s most significant engineering achievement of the twentieth century, and history’s second most significant innovation of the past 6,000 years, after the printing press. Access to reliable, affordable energy (especially electricity) is absolutely essential for conquering poverty, say World Bank vice president Rachel Kyte and Dr. Amartya Sen, Nobel Laureate in Economics.
Over the past 150 years, fossil fuels have liberated billions of people from short, brutal lives of grinding poverty, disease and malnutrition. Over the past three decades, fossil fuels enabled 1.3 billion people to escape debilitating energy poverty – over 830 million thanks to coal alone – and China connected 99% of its population to the grid and increased its steel production eight times over, mostly with coal.
However, 1.3 billion still are still desperate for electricity and modern living standards. In India alone, over 300 million people (the population of the entire United States) remain deprived of electricity. In Sub-Saharan Africa, some 615 million (100 million more than in the USA, Canada and Mexico combined) still lack this life-saving technology, and 730 million (the population of Europe) still cook and heat with wood, charcoal and animal dung. Millions die every year from lung and intestinal diseases, due to breathing smoke from open fires and not having the safe food and water that electricity brings.
Ending this lethal energy deprivation will require abundant, reliable, affordable energy on unprecedented scales, and more than 80% of it will have to come from fossil fuels. Coal now provides 40% of the world’s electricity, and much more than that in some countries. That is unlikely to change anytime soon.
In fact, we cannot even build wind and solar facilities without coal and petroleum – to mine, smelt, manufacture and transport materials for turbines, panels and transmission lines. Analysts calculate that it takes 150 tons of coal and coal-equivalent to build, transport and install one onshore turbine, and 250 tons for a single offshore turbine. We also need fossil fuels to build and operate backup power units that also require vast amounts of land, cement, steel, copper and other materials. This is hardly sustainable.
Coal-fired power plants in China, India and other developing countries do emit large quantities of real pollution: sulfates, nitrous oxides, mercury and soot that can cause respiratory problems and death. However, modern pollution control systems could eliminate most of that. Some countries have chosen to build greater numbers of less expensive power plants without scrubbers and other emission controls, rather than smaller numbers of much more costly generators with control systems.
Others have confronted lending institutions like President Obama’s Overseas Private Investment Corporation (OPIC) and Ms. Kyte’s World Bank, which often refuse to lend for coal or even gas-based electricity generators – even with state-of-the-art pollution controls. However, as nations become wealthier because of electricity and their citizens demand cleaner air, both situations are likely to change.
Striking a “compromise” by selling only coal holdings would do nothing to change these realities; the fact that such an action would do nothing to reduce atmospheric carbon dioxide levels or stabilize Earth’s always fickle climate; or the brutal truth that expanding the war on coal would primarily hurt America’s coal mining families and communities, as well as all who depend on coal for electricity.
Guidelines for Debate, Decisions on Divestment
Divestment activists counter these facts by claiming that climate science is settled and the world faces a manmade global warming cataclysm. On that basis they demand that colleges and universities forego any debate and rush to judgment on hydrocarbon divestment. However, as we have pointed out here and elsewhere, the alleged “97% consensus” is a fiction, no manmade climate crisis is looming, and there is abundant evidence of massive “pHraud” in all too much climate chaos “research.”
Nations have a moral imperative to utilize the most productive, life-giving energy sources available, and truly ethical institutions have a moral obligation to help them. If the world is serious about affordable modern energy, economic growth, poverty reduction, and improved health and living standards for all, fossil fuels are essential. Disinvestment initiatives will only undermine progress in these areas.
We therefore ask: What right do divestment activists and climate change alarmists have to deny Earth’s most destitute people access to electricity and motor fuels, jobs and better lives? To tell the world’s poor what level of economic development, health and living standards they will be “permitted” to enjoy?
What right do they have to subject people to policies that “safeguard” impoverished families from hypothetical, exaggerated, manufactured and illusory climate change risks 50 to 100 years from now – by imposing energy and healthcare deprivation that could kill them tomorrow?
That is not ethical or socially responsible. It is intolerant and totalitarian. It is arrogant, immoral, lethal and racist.
To these activists, we say: “You first. Divest yourselves first. Get fossil fuels out of your lives. Go live in Sub-Saharan Africa just like the natives for a few months, drinking their parasite-infested water, breathing their polluted air, enduring their disease-ridden flies and mosquitoes – without benefit of modern drugs or malaria preventatives… and walking 20 miles to a clinic when you collapse with a fever. If you do all that and survive, then you may have earned a right to criticize other people’s aspirations.
To colleges, universities and pension funds, we say: Please demand and ensure open, robust debate on all these issues, before you vote on divestment. Allow no noisy disruption, walk-outs or false claims of consensus. Compel divestment advocates to defend their position, factually and respectfully. Protect the rights and aspirations of people everywhere to reliable, affordable electricity, better living standards and improved health.
And perhaps instead of “Global Divestment Day,” host and honor “Global Praise Hydrocarbons Day.”