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Fracking fallout: Colleges ditch fossil-fuel stock

- The Washington Times - Wednesday, December 11, 2013

BERKELEY, Calif. — Like most other college campuses, the University of California at Berkeley has all the ingredients for a pitched battle over the school's financial ties to the fossil-fuel industry.

Liberal student body and faculty? Check. Hefty university endowment that includes investments in oil and gas drillers? Check. Virtually nobody on campus expressing skepticism about man-made climate change? Check.

The result is that the fossil-fuel divestiture campaign has gone in two years from nearly nonexistent to arguably the hottest campus movement since South Africa divestment in the 1980s. Hundreds of campuses have started fossil-free campaigns, while eight small colleges or systems have voted to purge oil-and-gas investments from their portfolios.

The revival of the domestic energy industry with the onset of the fracking revolution in recent years has intensified the passion of those demanding financial purity.

Divest Binghamton, an 8-month-old movement at the State University of New York, stepped directly into a raging debate in upstate New York over fracking, a common term for the hydraulic fracturing technique that extracts oil and gas from rock by injecting high-pressure mixtures of water, sand or gravel and chemicals.

"As hydrofracking companies try to extract nonrenewable resources in our area, the Southern Tier of New York — and in ways that are economically, socially and environmentally costly — the juxtaposition between the human-induced causes and the human-felt effects of climate change are starkly apparent," the group said in a statement this month.

Activists at Georgetown also are tying the divestiture fight to the fracking boom.

"Communities in Appalachia are being poisoned from the byproducts of coal refinement and their mountains blown apart by mountaintop removal while communities in Pennsylvania are being poisoned from fracking," Sydney Browning, co-founder of GU Fossil Free, told The Hoya student newspaper. "I don't think it's radical to want my university to not be complicit in these things."

Berkeley's movement is less than a year old, but Ophir Bruck, the senior who is leading Fossil-Free Cal, can tick off an impressive list of wins. Among them: A student body referendum in favor of divestment passed with 73 percent of the vote, and the student government voted to divest its holdings in the oil and gas industry.

"Our movement is just revving up, and it's about to escalate," Mr. Bruck said. "We're basically saying, 'We're not taking "no" for an answer, and we're not giving up.' We want to give them another chance to be on the right side of history."

Standing firm

"Them," in this case, is the University of California Board of Regents and the Berkeley chancellor, who have yet to jump on the divestment bandwagon. They are not alone: College presidents at schools such as Bowdoin, Middlebury, Swarthmore and Vassar are resisting calls for divestment even as they express concern over climate change.

Harvard University President Drew Faust laid out the case against fossil-fuel divestiture in an Oct. 3 statement, arguing that the primary purpose of the school's $32 billion-plus endowment is the advancement of academic goals. The fund, she added, should not be used as "an instrument to impel social or political change."

"Conceiving of the endowment not as an economic resource, but as a tool to inject the university into the political process or as a lever to exert economic pressure for social purposes, can entail serious risks to the independence of the academic enterprise," Ms. Faust said.

Brown University President Christina Paxson pointed out in an Oct. 27 letter that coal provides about 40 percent of the world's electricity, and ceasing production and use "would itself create significant economic and social harm to countless communities across the globe."

The movement's roots are in the efforts of environmentalist and author Bill McKibben. His group 350.org urges colleges, cities, states and churches to sell their stakes in 200 publicly traded fossil-fuel companies, saying, "If it is wrong to wreck the climate, then it is wrong to profit from the wreckage."

The campaign received what appeared to be the blessing of the White House in June when President Obama said in a speech on climate change at Georgetown University, "Invest. Divest."

University divestiture isn't likely to have much impact on the bottom line of oil and gas companies, whose stocks tend to be top performers, but divestment in this case "isn't primarily an economic strategy, but a moral and political one," says a statement on the 350.org website Fossil Free.

It's also a public relations strategy aimed at turning companies such as Exxon Mobil Corp. and Royal Dutch Shell PLC into pariahs, Mr. McKibben said in a February article in Rolling Stone.

'Preposterous'

Eric Wohlschlegel, a spokesman for the American Petroleum Institute, had another word for the divestiture movement: "preposterous."

"It does a disservice to our nation's pursuit of long-term energy security and to the thousands of families that rely on the substantial investment returns provided to college endowments by the oil and natural gas industry," said Mr. Wohlschlegel. "It has been one of the few bright spots in our economic recovery."

Divestment advocates want universities to move their capital to renewable-energy companies instead of fossil fuels, even though those ventures are typically less financially stable than oil and gas.

"[I]t's a myth that renewable energy will be more expensive than fossil fuels," Berkeley junior Victoria Fernandez said in an email. "Rapidly deploying renewables and increasing efficiency will help us insulate ourselves from the price fluctuations associated with oil, gas and coal."

Industry officials point to the boom in fossil fuel production through fracking and other techniques that allow drillers to access shale reserves such as the Bakken field in North Dakota and the Denver-Julesburg basin in Colorado.

"There is an energy revolution taking place in America and it is creating millions of new American jobs and generating trillions of dollars of revenue for the government at a time when we need it most,"Mr. Wohlschlegel said.

Such arguments rarely penetrate the perimeters of campuses like Berkeley. On Friday, the university's Graduate Student Assembly is expected to vote on a divestiture resolution, and Mr. Bruck is optimistic about its chances.

"We've had to do a lot of pushing, but we're moving in the right direction," he said.

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