Tag: fossil fuels

CalPERS and CalSTRS Know Fossil Fuel Divestment is a Recipe for Disaster

Mary Pat Campbell

Link: https://alec.org/article/calpers-and-calstrs-know-fossil-fuel-divestment-is-a-recipe-for-disaster/

Excerpt:

In the Golden State, the California State Teachers’ Retirement System (CalSTRS) and the California Public Employees’ Retirement System (CalPERS) are waking up to the fact that divestment hurts retirees and taxpayers.

CalPERS and CalSTRS are two of the largest pension funds in the country (by both membership and portfolio size). As California Senate Bill 252, a bill calling for fossil fuel divestment from public retirement systems in California, continues to move along in committee, CalPERS and CalSTRS have publicly opposed the bill because it conflicts with their duties as pension plan managers.

As ALEC VP of Policy Lee Schalk and I mentioned in our OC Register column last month, politicized investment strategies are a recipe for disaster. Research from Mike Edleson and Andy Puzder found that ESG investing yields lower returns than investing without political constraints. Additionally, researchers at Boston College found that ESG has failed to achieve its stated social goals.

Both CalPERS and CalSTRS realize that divestment hampers their ability to put members’ retirements benefits first, and the research shows divestment does not achieve its stated social goals. 

Author(s): Thomas Savidge

Publication Date: 28 April 2023

Publication Site: ALEC

CalSTRS’ board sets science-based emissions goal for 2030 and commits to additional net zero actions

Mary Pat Campbell

Link: https://www.calstrs.com/calstrs-board-sets-science-based-emissions-goal-for-2030-and-commits-to-additional-net-zero-actions

Excerpt:

The board set four initial measures for integrating the net zero strategy across the portfolio, with a specific focus on emissions reductions:

  1. Interim science-based goal. Reduce greenhouse gas emissions across the investment portfolio by 50% by 2030, consistent with the latest findings of the United Nations’ Intergovernmental Panel on Climate Change.
  2. Systematic decision-making process. Adopt processes to incorporate greenhouse gas emissions into investment decisions as part of traditional risk-and-return analyses and their potential impacts on the CalSTRS Funding Plan.
  3. Reduced emissions. Target a 20% allocation of the Public Equity portfolio to a low-carbon index to significantly reduce portfolio emissions while managing active risk.
  4. Integration of climate scenarios. Incorporate future climate-related scenarios into CalSTRS’ asset-liability modeling framework to help guide CalSTRS’ investment allocations.

These actions reflect increasing global momentum toward achieving a net zero economy. CalSTRS will review its net zero goals and strategy annually to adjust for the latest available data, market fluctuations and related scientific advancements.

“CalSTRS’ net zero pledge is rooted in its century-long promise to deliver a secure retirement for California’s hard-working educators and their families,” said Board Chair Harry Keiley. “Taking these interim actions to reduce emissions in our portfolio is a profound step forward and underscores our commitment to considering the impacts of climate change fully and systematically as we manage our fund on every level.”

Author(s): Rebecca Forée

Publication Date: 31 August 2022

Publication Site: Calstrs

New York Announces Historic Fossil Fuel Divestment Plan

Mary Pat Campbell

Link: https://www.nrdc.org/experts/rich-schrader/new-york-announces-historic-fossil-fuel-divestment-plan

Excerpt:

As part of the plan, the Comptroller announced an aggressive schedule of divestment activity over the next four years. This year already, the Common Fund has divested from 22 coal companies. In the next few months, it will divest from companies with tar sands investments. After that, over the next several years, it will divest from these subsectors of the fossil fuel industry:

  • Shale oil and gas firms;
  • Integrated oil/gas majors like Exxon and Chevron as well as smaller integrated companies;
  • All oil/gas exploration and production firms;
  • Fossil fuel service firms, like Schlumberger;
  • And finally, fossil fuel transportation and pipeline companies like Kinder Morgan and Williams.

In addition, the Common Fund is moving forward with two key steps, both supported by the 2018 Decarbonization Panel that was jointly appointed by Governor Cuomo and Comptroller DiNapoli. First, the Fund will hire new staff trained in financial analysis of climate impacts and dangers. And second, the Common Fund will actively vote against board directors of non-fossil fuel companies that do not prioritize climate concerns in alignment with the Fund’s decarbonization goals.

Author(s): Rich Schrader

Publication Date: 9 Dec 2020

Publication Site: NRDC

Insurers Increasingly Withdraw From Fossil Fuel Projects: Climate Activists’ Report

Mary Pat Campbell

Link: https://www.insurancejournal.com/news/international/2022/10/20/691030.htm?utm_source=dlvr.it&utm_medium=twitter

Excerpt:

Insurance companies that have long said they’ll cover anything, at the right price, are increasingly ruling out fossil fuel projects because of climate change – to cheers from environmental campaigners.

More than a dozen groups that track what policies insurers have on high-emissions activities say the industry is turning its back on oil, gas and coal.

The alliance, Insure Our Future, said Wednesday that 62% of reinsurance companies – which help other insurers spread their risks – have plans to stop covering coal projects, while 38% are now excluding some oil and natural gas projects. (The Insure Our Future report on re/insurers’ fossil fuel activities can be viewed here).

In part, investors are demanding it. But insurers have also begun to make the link between fossil fuel infrastructure, such as mines and pipelines, and the impact that greenhouse gas emissions are having on other parts of their business.

Publication Date: 20 Oct 2022

Publication Site: Insurance Journal

Princeton to ‘Dissociate’ Fossil Fuel Investments

Mary Pat Campbell

Link: https://www.ai-cio.com/news/princeton-to-dissociate-fossil-fuel-investments/

Excerpt:

Princeton University’s board of trustees has voted to dissociate from 90 companies as part of an administrative process established last year that focuses on companies involved in the thermal coal and tar sands segments of the fossil fuel industry, or that are engaged in climate disinformation campaigns.

Thermal coal, which is burned for steam and used to produce electricity, was made a priority because it emits significantly more carbon dioxide than alternative available fossil fuels, the university said. It also said that tar sands oil, which is derived from loose sands or sandstone, also produces much higher emissions than conventional crude oil, including in its extraction and production process. However, Princeton said thermal coal and tar sands businesses can be exempt from dissociation if they can prove they can meet a rigorous standard for greenhouse gas emissions.

And in a move to help the university reach its goal of eventually having an endowment portfolio that is net zero of greenhouse gases, the Princeton University Investment Company, which manages the university’s $38 billion endowment, will also eliminate all holdings in publicly traded fossil fuel companies. PRINCO said it will also ensure that the endowment does not benefit from any future exposure to fossil fuel companies.

Author(s): Michael Katz

Publication Date: 6 Oct 2022

Publication Site: ai-CIO

NY Common to Review Net-Zero Readiness of Oil and Gas Firms

Mary Pat Campbell

Link: https://www.ai-cio.com/news/ny-common-to-review-net-zero-readiness-of-oil-and-gas-firms/?oly_enc_id=2359H8978023B3G

Excerpt:

The New York State Common Retirement Fund is evaluating 28 publicly traded oil and gas companies to determine if they are ready to transition to a low-carbon economy, according to a release from the state comptroller’s office.

The $272.1 billion pension fund is asking each company, which includes energy giants BP, Chevron, Exxon Mobil and Shell, to provide information on how prepared it is to transition to a net-zero economy.

….

The assessment of the pension fund’s integrated oil and gas holdings is part of its broader review of energy sector investments that it believes face significant climate risk. When DiNapoli announced in late 2020 that the pension fund would transition its portfolio to net-zero by 2040, he said the process would include completing a review of energy sector investments within four years to assess transition readiness, as well as a divestment of companies that don’t meet its climate-related investment risk standards.

Less than two years into that review process, which has so far included an evaluation of shale oil and gas, oil sands and coal companies, the pension fund has decided to divest from 55 firms that it determined were not prepared to transition to a net-zero economy.

Author(s): Michael Katz

Publication Date: 15 Aug 2022

Publication Site: ai-CIO

Price of Crude Jumps as EU Foolishly Doubles Down On Sanctions

Mary Pat Campbell

Link: https://mishtalk.com/economics/price-of-crude-jumps-as-eu-foolishly-doubles-down-on-sanctions

Graphic:

Excerpt:

“This is surely unworkable – a carve out for Hungary, which allows its refineries to enjoy sky rocketing margins on sales elsewhere in the EU because of their access to Russian crude. It’s almost laughable,” said Jeremy Warner.

It seems the carve out for Hungary was “workable” after all, with predictable results.

Russia, China, Hungary, and energy producers are the beneficiaries of these terribly counterproductive sanctions.

This is my “Hoot of the Day” but it’s early. I may easily need bonus hoots. 

Author(s): Mike Shedlock

Publication Date: 31 May 2022

Publication Site: Mish Talk

Why SWIFT Sanctions on Russia Might Not be Enough

Mary Pat Campbell

Link: https://www.rstreet.org/2022/03/01/why-swift-sanctions-on-russia-might-not-be-enough/

Excerpt:

The news immediately following the removal of some Russian banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network has been a moment of victory for the international community in condemning Russia’s invasion of Ukraine. Soon after the sanctions took effect, the ruble sunk 21 percent compared to the U.S. Dollar (USD). Russia’s central bank is in damage control mode, raising interest rates to 20 percent. At a glance it might seem like these punishing sanctions could force Russia to change course, but any optimistic takes should be tempered by a review of the effect of sanctions after Russia’s annexation of Crimea in 2014.

….

Unlike the United States and other western nations where oil and gas production are controlled by private companies, Russia’s oil and gas production is managed by state-owned enterprises. Oil and gas production in Russia directly finances Russia’s budget, including its military budget, and in 2019 oil and gas exports accounted for 39 percent of Russia’s federal budget revenue. Part of the reason oil and gas is such a lifeline to the Russian budget can be attributed to the effect of the sanctions. In January of 2014, the ruble was $0.03 USD, and by December 2014 it fell to $0.019 USD. In that same year, Russia was the largest producer of crude oil and exported 4.7 million barrels per day. The price of oil in January 2014 was $108/barrel, and by December had fallen to $62/barrel—thanks to high U.S. production. The value of Russian oil exports went from 16.9 billion rubles per day in January to 15.4 billion rubles per day in December, as the sharp decline of oil prices was counteracted by the rising ruble value of oil from the sanctions. If oil prices had remained constant, then the effect of the sanctions would have been to increase Russian export value in the local currency to 26.7 billion rubles per day. In plain English, the harder the sanctions hit, the more valuable Russian energy exports become and the better they are able to sustain the Russian budget.

Author(s): Philip Rossetti

Publication Date: 1 Mar 2022

Publication Site: R Street

Influential fund manager Green Century tells insurers to drop Big Oil

Mary Pat Campbell

Link: https://www.marketwatch.com/amp/story/influential-fund-manager-green-century-tells-big-insurers-to-drop-big-oil-11645049047?twclid=11498308136175906819

Excerpt:

Green Century Capital Management tried to use shareholder muscle to persuade at least a trio of insurance companies to drop fossil-fuel clients.

So far, the insurance firms aren’t biting; all three have filed no-action requests with the Securities and Exchange Commission.

The resolutions, in advance of proxy season this spring, call on Chubb CB , Travelers TRV and The Hartford HIG to take this bold step as private-sector efforts to curb global warming from the burning of coal, oil CL00 and gas NG00 pick up, alongside global government action.

The insurance resolutions represent the first time that shareholders have laid down this sizable challenge to this industry for what the activists say are its contributions to the climate crisis. 

Author(s): Rachel Koning Beals

Publication Date: 17 Feb 2022

Publication Site: MarketWatch

City Of Chicago Shunning Fossil Fuel Investments. Who Benefits? Russia. – Wirepoints

Mary Pat Campbell

Link: https://wirepoints.org/chicago-shunning-fossil-fuel-investments-as-nation-struggles-with-higher-energy-costs-wirepoints/

Graphic:

Excerpt:

The timing on Wednesday was impeccable. I was looking at the price of oil, which was up four percent that day and about to pass $100/barrel. Energy stocks were up over one percent despite a horrible day for the rest of the market.

That’s when an email popped up with a story in Crain’s headlined “Chicago moving to divest from fossil fuels.”

….

So, with inflation raging, gasoline moving towards $4.00/gallon and Russia murdering Ukrainians with the help of American oil purchases, Chicagoans can take comfort knowing that the city will refuse to invest in oil and other fossil fuel production and thereby “will be sending a message that Chicago is permanently leaving dirty energy in the past and welcoming a clean energy future for generations to come.”

That’s from Chicago Treasurer Melissa Conyears-Ervin. She and members of the City Council, with Mayor Lori Lightfoot’s support, are pushing for an ordinance to mandate that the city divest its funds from fossil fuel companies, as Crain’s reported.

In fact Conyears-Ervin had already made oil and gas divestment office policy. The new ordinance would make the change permanent going forward. Her office has already removed $70 million in fossil fuel-associated bonds from the city’s portfolio, she says.

How wise has it been lately to be shunning fossil fuel investments? Here’s a chart comparing performance year-to-date of the S&P 500 to XLE, an ETF basket of mostly oil and gas companies. While the market in general is down some 10% the oil and gas stocks are up over 21%.

Author(s): Mark Glennon

Publication Date: 25 Feb 2022

Publication Site: Wirepoints

Mapped: Visualizing U.S. Oil Production by State

Mary Pat Campbell

Link:https://www.visualcapitalist.com/mapped-u-s-oil-production-by-state/

Graphic:

Excerpt:

A total of 32 of the 50 U.S. states produce oil. They are divided among five regional divisions for oil production in the U.S., known as the Petroleum Administration for Defense Districts (PADD).

These five regional divisions of the allocation of fuels were established in the U.S. during the Second World War and are still used today for data collection purposes.

Given that Texas is the largest U.S. oil-producing state, PADD 3 (Gulf Coast) is also the largest oil-producing PADD. PADD 3 also includes the federal offshore region in the Gulf of Mexico. There are around 400 operational oil and gas rigs in the country.

Author(s): Anshool Deshmukh

Publication Date: 10 Aug 2021

Publication Site: Visual Capitalist

California Public Pensions Are Major Fossil Fuel Investors

Mary Pat Campbell

Link:https://www.rigzone.com/news/wire/california_public_pensions_are_major_fossil_fuel_investors-09-dec-2021-167254-article/

Excerpt:

California’s climate-conscious policies aren’t matched by the investment choices of its largest public pension funds, according to a report from two environmental groups. 

Of the 14 top U.S. pension funds analyzed by Stand.earth and Climate Safe Pensions Network, California Public Employees’ Retirement System, known as Calpers, and California State Teachers’ Retirement System, known as CalSTRS, were the largest investors in fossil fuel companies, with $27.1 billion and $15.7 billion, respectively, according to findings published Wednesday. 

The two combined hold about half the fossil fuel assets for the entire group, according to the study. Calpers also came first in fossil fuel holdings as a proportion of its total assets under management, at 6.9%.  

….

The New York State Teachers’ Retirement System had the second-largest share of its portfolio invested in fossil fuels, at 6.6%. 

Author(s): Robert Tuttle

Publication Date: 9 Dec 2021

Publication Site: Rigzone