DIVESTMENT BILL PITCHED AS WAY TO SPEED DECLINE OF FOSSIL FUELS
By Andy Metzger
STATE HOUSE NEWS SERVICE
STATE HOUSE, BOSTON, OCT. 11, 2017....Forecasting the global regulatory climate will become more resistant towards oil and gas producers, environmentalists pressed lawmakers Tuesday to force the state's pension fund out of fossil fuel investments.
A representative for the oil and gas industry countered that proposed restrictions could hamper the fund's ability to invest in renewable ventures by energy companies that maintain refineries.
Environmentalists, who were joined by some public sector union heads, made a two-pronged argument to the Public Service Committee. Fossil fuels are a losing investment, they said, and the multi-billion dollar pension fund should be used as an instrument to slow global warming.
Legislation filed by Cambridge Democrat Rep. Marjorie Decker would require the pension fund to divest thermal coal holdings immediately. The bill (H 3281) would also form a commission to study more sweeping divestments from fossil fuel companies, and require the pension fund to follow the recommendations made by the commission.
"We've seen the bankruptcy of much of the coal industry," said Matthew Patsky, CEO of Trillium Asset Management, which oversees $2.8 billion in assets and has been managing fossil-free portfolios for more than three decades. He said investors make "no sacrifice" by avoiding fossil fuel stocks.
The energy industry recognizes their future lies in new forms of generation, argued David O'Donnell, of the Massachusetts Petroleum Council, and if Decker's bill became law the pension fund might be barred from investing in an oil company transitioning to a renewable energy company.
"They see the future. They see what's coming 10, 20, 30 years down the road. Combustion engines will probably disappear in 30 years, maybe before. They know that. They're in the business of making money," said O'Donnell. He said that since 2000, the natural gas and oil industry has invested $15 billion in nonhydrocarbon technologies, including wind power, solar energy and other renewables.
The Pension Reserves Investment Management Board, which oversees the pension fund, did not submit testimony to the committee. The fund ended fiscal 2017 with $67 billion in assets.
While the Democrat-controlled Legislature has recently approved numerous policies to boost renewable energy development, similar divestment legislation has failed to gain traction in recent years amid concerns that binding the pension fund's investments could have negative financial ramifications.
Beverly Rep. Jerald Parisella, the House chairman of the committee, and Arlington Sen. Cindy Friedman, the Senate chairwoman, were non-committal about the bill Tuesday.
"I want to review all the testimony," said Parisella after the hearing. "I've got an open mind."
"I'm going to look at it very, very seriously," Friedman said.
The fossil fuel industry's investment value is based on plans to extract fuel that would generate 2,795 gigatons of carbon dioxide, but the international Paris agreement seeks to limit emissions to 800 gigatons this century, according to Craig Altemose, executive director of Better Future Project.
"Not only are most of Exxon’s untapped reserves likely to be unsellable, some of their current active wells may be as well," Altemose told the committee, predicting that "companies like ExxonMobil will thus see their market value plummet like coal companies saw once the Obama administration got serious about regulating coal."
President Donald Trump has promised to return jobs toward the coal sector and announced the United States withdrawal from the Paris agreement in June.
"We have among the most abundant energy reserves on the planet, sufficient to lift millions of America’s poorest workers out of poverty," Trump said in June, according to a transcript of his remarks. "Yet, under this agreement, we are effectively putting these reserves under lock and key, taking away the great wealth of our nation -- it's great wealth, it's phenomenal wealth; not so long ago, we had no idea we had such wealth -- and leaving millions and millions of families trapped in poverty and joblessness."
Altemose argued the long-term global trend is to move away from fossil fuels and others said divestment is an imperative for the health of the world's climate.
"Climate change isn't something we can put off. It's something that we have to protect against," said Massachusetts Teachers Association President Barbara Madeloni.
Click here to start your free, no‑obligation, 21-day trial.
- Bump Puts Thumb on 4th District Scale 4:50 PM Mon
- Somerville Challenger Knocks House Leadership 9:31 AM Thu
- Pelosi Touts Neal's Leadership 12:18 PM Wed
Latest COVID-19 Figures in Mass.
|COVID-19 Municipal Data||List Including Color Categories|
State House Takeout Podcast
The Massachusetts Almanac
FREE throughout 2020 for SHNS subscribers!
Click here to learn more