Some Thoughts On Fossil Fuel Divestment Overture At The 221st General Assembly, PC(USA)

Let me begin this post with full disclosure that this piece probably falls more into the category of commentary than analysis or reporting.

Second, why the heck would I be writing commentary on this? If you are not aware I am a geologist by profession so I do have some background in this even though my primary specialty is earthquakes. But I did work for an oil company one summer during college.

Third, this is business that is before the 221st General Assembly of the Presbyterian Church (U.S.A.) next week so it is of concern to many of us.

The main overture that I want to speak to is item 15-01 from the Presbytery of Boston with concurrences from 11 other presbyteries. It will be reviewed by the Assembly Committee on Immigration and Environmental Issues. This committee only has three other items of business to consider besides this one, one regarding immigration, one about sustainable development and one about coal export projects.

The overture calls for the 221st GA to recognize the “moral mandate for humanity to shift to sustainable energy.” As part of this it asks for no new PC(USA) investments in fossil fuel companies, divestment from current holdings over the next five years, report on the progress and tell the fossil fuel companies why they are doing this.

In considering fossil fuel divestment let me discuss two particular aspects of this topic that I don’t think are getting aired in the materials I have read.

First, go with me on a thought exercise. Don’t worry, this won’t take long…

Name the materials in your home that are extracted from the earth.

I do this exercise with students all the time and it is quicker to name the materials that are not earth-related. The obvious one is wood if you live in a wood frame house, have wood shingles and probably have wooden furniture. The other is fabric that comes from animals (such as wool or leather) or plants (cotton and hemp for example). In my experience that is it.

Someone usually asks about the carpets and if you have common polyester carpets guess what, they come from petrochemicals. In fact, you may be surprised to find the amount of material in your home or car that are petrochemicals.

My point is that saying companies are just about fossil fuels ignores other uses of the materials extracted, whether it be the petroleum that goes into plastics or the coal that goes to make coke for iron/steel production. Yes, according to the ExxonMobil Annual Report only 11.7% of their annual revenues were from the chemical side, but neither the overture nor the Carbon Tracker report they reference make any mention of secondary uses of the material.

The second thing that strikes me is the method being employed. I always wonder when companies or industries are singled out for boycotts or divestment when we are trying to make societal changes. I think it is generally better to change things either through the demand side, not the supply side of the equation or to promote better alternatives on the supply side. Before Edwin Drake drilled the first commercial oil well in the United States lamp oil came from whaling. While whaling is still an active, but controversial industry, the whale oil portion did not drop off because of government regulation or environmental concerns. Rather, the rise of the petroleum industry produced a less-expensive alternative.

Similarly, I would argue that the same thing would be more effective here. Time and resources should be put into alternate and more environmentally friendly sources of energy and helping develop conservation attitudes.

To this end, I appreciate the advice provided by the Assembly Committee on Social Witness Policy which instead suggests a balance approached typified by the amendment they suggest that says “To this end,
the church shall work to shift its energy investments increasingly into
renewable sources as it undertakes parallel actions to reduce its
nonrenewable energy consumption and that of its members.”

Let me ask if more can be done internally by the PC(USA). Can the national office be heated, cooled and lit with more alternative energy? Can trips to the offices be reduced by telecommuting or car pooling? Can the General Assembly reduce its carbon footprint? Can incentives be given to employees of the PC(USA), its middle governing bodies or its churches to conserve, use alternate energy and reduce their carbon footprint. We ask others to be environmentally responsible, how can we set the example and promote that within our denomination?

There are also a number of pragmatic considerations in all this. Yes, this is a social witness statement and that alone is sometimes good enough. But remember that the General Assembly speaks only for itself and while there are obviously at least 12 presbyteries that agree with this action the only investments it directly controls are its own. Furthermore, that is not always the case as I remember hearing representatives from the Board of Pensions and the Foundation at the last GA talking about the investment process and what influence they did, or did not have, on the outside investment advisers they contracted with. Finally, I do not want to diminish the fact that this is making a social witness statement and any actual effects are just part of the equation, but it is interesting reading about how Stanford made the decision to divest from only coal when a full fossil fuel divestment was asked for by a student group. The change was both for financial reasons as well as moral as this article discusses:

Beyond the hit to Stanford’s pocketbook, the university figured that
divesting from all fossil-fuel stocks would be seen, justifiably, as too
ivory-tower. “It would have been viewed as hypocritical to say, `You
should divest from fossil fuels,’ when everyone on this campus consumes
fossil fuels,” [Stanford President John] Hennessy said. “There’s a hypocritical issue to it.” And
what’s true for Stanford, he noted, is true for the globe. “You try to
replace all fossil fuels? We are so far from that happening.”

divesting just from coal-mining stocks should, financially, have “little
or no endowment impact,” Hennessy said. The university, he said, can
put the dollars it was investing into coal-mining companies into other
energy sourcesperhaps other fossil fuelswhich,
like coal stocks, help guard the endowment against the threat of
inflation. Moreover, Stanford will remain invested in coal consumption.
The divestment doesn’t apply to stocks of power companies that burn
coal. And it doesn’t apply to shares in steel makers, Hennessy noted,
for whom a fuel source other than coal isn’t readily apparent.

Finally, the argument can be made that keeping the stock and using it as the entry into stockholder meetings and resolutions is a more effective method to promote a social witness policy.

So there are some of my thoughts on the matter. Your mileage may vary. But this overture has plenty of advice attached to it and based on how Assemblies operate I am pretty confident it will be in a much different form when it reaches the plenary and then my undergo another revision, possibly major. Or maybe it will fly through and get put on the shelf with all those other social witness statements. Stay tuned…

[Addendum: Full Disclosure: First, I own stock in energy companies
because when I started investing the advice I received from my
Presbyterian minister – a former stock broker – was “invest in what you
know” and I knew geology. Second, a notable portion of my undergraduate education was provided by scholarships from energy companies and even some money that come from Edwin L. Drake a long time ago.]

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