By June 7, 2016 Read More →

Divestment, “leave it in the ground” agenda threatens consumers and economic growth

AAA estimates that American consumer saved, on average, over $550 in 2015 on transportation fuel costs as a result of abundant energy

divestmentWASHINGTON – The District of Columbia government’s decision to force its $6.4 billion pension fund to fully divest in 200 fossil fuel companies has drawn heavy fire from the oil and gas industry.

“Divestment is a tactic of misinformed activists whose ‘leave it in the ground’ agenda is incompatible with job creation, affordable energy for consumers, and economic prosperity,” said Kyle Isakower, API VP of regulatory and economic policy.

“Millions of retirees and pension holders depend on income from oil and natural gas investments to live. Government pension fund managers have a fiduciary responsibility to ensure the greatest return for their investors. Divestment from energy stocks is likely to reduce investment returns and is therefore not in agreement with their fiduciary responsibility.”

The DC municipality’s decision is not as significant as environmental groups claim, says DivestmentFacts, because pension funds invest only a small portion of their portfolios directly in fossil fuels, preferring mutual funds, commingled funds and private equity, which invest in fossil fuels.

“Divesting from only direct holdings has been an increasingly popular way to satisfy divestment activists’ demands without incurring the costs associated with actually dropping all fossil fuel investments,” DivestmentFacts said in a Monday post.

Fossil fuels provide more than 80 per cent of the energy Americans use every day, according to the Energy Information Administration.

“The United States is the biggest producer of oil and natural gas in the world and at the same time leading the world in reducing carbon emissions. ‘Leave it in the ground’ activists are succumbing to a false choice,” said Isakower.

IHS estimated that average U.S. disposable household income was $1337 higher in 2015 given lower home energy costs and other savings brought about by unconventional development.

“America’s energy renaissance is helping to reduce costs for American consumers and businesses while lowering our emissions. Competitive forces and industry innovation are driving technological advances and producing clean-burning natural gas that has reduced carbon emissions to near 20-year lows.

AAA estimates that the American consumer saved, on average, over $550 in 2015 on transportation fuel costs as a result of abundant energy.

“The oil and gas industry is also the leading investor in zero- and low-carbon technologies among all industrial sectors. We can create jobs, provide affordable energy to Americans, and continue to lead in reducing our nation’s emissions.”

Environmental groups applauded the move by the pension fund.

“The hardworking public servants who are beneficiaries of this fund, and the District residents they serve, should applaud the DCRB for taking the commonsense step to divest from increasingly risky and volatile dirty fuel investments,” said Matthew Gravatt, chair of the DC Chapter of the Sierra Club.

“This is a major step forward for the District in responding to the real effects and devastating potential of climate change. The DCRB’s decision to divest its $6.4 billion fund from dirty fuel companies and big polluters makes DC a leader among municipalities taking action to address climate change.”

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