Divestment: Should Pitt Stop Investing in Fossil Fuel Companies?

investing ethicsThere is a growing movement around Oakland for [1]divestment, from fossil fuel companies, which makes up a noticeable portion of Pitt’s investment portfolio. Pitt approximately has a $3.5 billion endowment, and the Fossil Free Pitt Coalition estimates that the university invests 4.7% ($164.5 million) of it in the fossil fuel industry.

The [2]Fossil Free Pitt Coalition has been leading the campaign for divestment on campus. The group includes 18 Pitt student organizations, and is led mainly by Pitt’s chapters of Americans for Informed Democracy (AID) and Free the Planet. Last year, the coalition held a rally at Schenley Plaza on Global Divestment Day. In addition, they currently have an active petition to the university that has garnered over 1,400 signatures.

I got the chance to talk to AID Pitt secretary, and Fossil Free Pitt Coalition member, Kai Pang about the impact divestiture from Pitt would have. He mentioned Pitt’s location in Appalachia and how a university as large as it, in a region rich in fossil fuel, would send a strong message nationwide. Western Pennsylvania and West Virginia are rich in both coal and natural gas. Coal mining has been practiced in these areas for over a century, and recently the controversial practice of [3]hydraulic fracturing has been used to access its natural gas reserves.

In addition, there are university campaigns for divestment all over the country, and Pitt’s coalition is connected to many of them. As Pang put it, “A victory for one of us is a victory for everyone”. Action by Pitt would build momentum off of recent action taken by the University of California (UC). [4]On September 19, 2015, the UC school system divested $200 million of its coal and tar sand holdings. It’s an unprecedented move among American universities, however UC still invests part of its $10 billion endowment in other fossil fuel industries.

Conversely, there are some legitimate concerns to be had about a potential Pitt divestiture from fossil fuel. Firstly, it could lower the stock value of many coal and natural gas companies that have invested significant capital into the economy of Western Pennsylvania and West Virginia. In addition, natural gas is considered by many to be an essential resource in furthering the U.S.’s energy independence, which would likely lower domestic energy costs. [5]In fact, one could argue that it has already been a major contributor to the lower oil prices we have been seeing over the past year or so. Natural gas is also seen by many as a bridge fuel towards alternative energies, because it burns cleaner than oil and coal.

In response to this concern, Pang referenced the fact that natural gas still causes significant damage to the environment, and is not renewable. The coalition holds the position that the only energy sources Pitt should invest in are clean, renewable ones.

The last thing I discussed with Pang was what Pitt should do instead with the money they currently have in fossil fuel holdings. He told us it should be reinvested for sustainable community development in Pittsburgh, mentioning that Pitt is seen as an economic leader in the city and that investing further in community development would only strengthen that reputation.

Divestment has steadily become a hot-button issue on college campuses worldwide. However, it is a complicated issue that does not necessarily have a right or wrong answer. Healthy debate will surely continue on this issue, and here at PBR, we encourage constructive debate about this issue in the comments section.

Mark Mulkeen

[1] The act of selling off an investment

[2] https://www.facebook.com/FossilFreePitt?fref=ts

[3] A.k.a. fracking; the practice of shooting water at high pressure into subterranean rocks to gain access to natural gas reserves. The practice has potential to cause varied forms of environmental damage.

[4] http://www.latimes.com/local/education/la-me-ln-uc-coal-20150909-story.html

[5] https://pittbusinessreview.com/2014/12/22/pbrs-guide-to-the-drop-in-oil-prices/






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