There’s a lot of noise out there, and it’s sometimes hard to differentiate research-based conclusions from faulty rhetoric. Check out the statements below to find out whether they’re grounded in fact … or grounded in folly.
I’ve heard people argue that “if it’s immoral to wreck the environment, then it’s immoral to profit from it,” so no one should invest in traditional fuel companies.
It’s highly problematic (and rather discriminatory) to label an entire industry—including hundreds of companies and millions of employees—as immoral.
But it’s particularly misguided when you’re talking about oil and natural gas. Why? Ask yourself these questions:
- Is providing affordable heat and electricity to low-income families immoral?
- Are seat belts, car seats, and airbags a net social good?
- How about protective gear for firemen, police, and military servicemen?
- Do you consider life-saving advancements in medicine—including CT scans, MRIs, IVs, blood transfusions, and artificial hips—moral?
- Does refrigeration and sanitary food packaging—which prevents numerous cases of food poisoning annually—benefit society?
- What about mass transit, bicycles, solar panels, and wind turbines?
- How about the laptops and cell phones that help us connect, communicate, and conduct business?
If you answered “yes” to any of the above, then you’ve acknowledged the moral applications of traditional fuels. That’s right—none of the above are possible without petrochemicals derived from oil and natural gas.
These products make life safer, healthier, and more enjoyable … and are so pervasively immersed in modern life that it’s virtually impossible to exist without them.
Certainly, pro-divestment activists have not divested themselves of these products. So there is some pretty stunning hypocrisy in publicly admonishing others to give up needed investment returns because of the supposed "immorality" of an industry, while personally continuing to enjoy the fruits of that same industry's efforts.
Verdict: GROUNDED IN FOLLY
Shouldn’t we just replace oil and natural gas with renewable energy sources like wind and solar?
There are few problems with this suggestion:
- Wind and solar are not established, reliable energy forms. The technologies involved are still being perfected and their intermittent nature (the wind doesn’t always blow nor does the sun constantly shine) make backup fuel sources non-negotiable.
- Building the kind of infrastructure required for wind and solar to massively expand would exorbitantly expensive. The International Energy Agency estimated it would cost $16.5 trillion to develop enough wind and solar capacity to substantially impact global warming.
- Wind and solar actually depend upon traditional fuels. Solar panels and wind turbines contain ethylene, a petrochemical that comes from oil or natural gas. That’s not counting the steel (which is extracted, processed, and transported using traditional fuels).
- There are no cost-efficient replacements for the petrochemicals that go into safety, health, technology, and transportation products that make modern life possible.
Verdict: GROUNDED IN FOLLY
We should pursue an “all of the above” energy strategy.
There are valid economic, social, and security-based reasons for pursuing a broad-based energy strategy. The United States will benefit from a flexible energy portfolio that allows different areas and markets to choose the kind of energy that best suits their needs.
As recently as 2014, President Obama credited the “All of the Above” energy strategy with having “substantial economic and energy security benefits [while] helping to reduce carbon emissions.”
“We need an energy strategy for the future, an ‘All of the Above’ strategy for the 21st century that develops every source of American-made energy,” he said.
Verdict: GROUNDED IN FACT
Climate change is a big issue. “Keep it in the ground” seems like a simple solution to the problem.
As Steve Everly from Energy in Depth pointed out, “‘Keep It In The Ground’ is a slogan, not a solution.”
Climate change is a complex phenomenon. Simplistic solutions to complex problems result in unintended consequences rather than improvement.
For instance, look at the push several years ago to mandate ethanol additives to fuel. It seemed like a simple way to address climate change—make companies add fuel made from corn to lessen the amount of gasoline in each gallon going into the tank. But now environmentalists are seeing the unintended consequences—prairies being overtaken by cornfields as demand explodes; run-off polluting rivers; and the uncomfortable realization “that this alternative that we’ve been promoting is today worse than oil.”[M1]
So how can you know if something’s a reasonable policy proposal versus an unrealistic slogan? One litmus test is whether those promoting it are actually walking the walk.
In this case, the activists pushing hysterically for the need to "Keep It in the Ground" don't themselves eschew the oil and natural gas products that they claim are ruining the earth.
If they truly believe that, then why do they continue to profit from using oil and natural gas products? We're not just talking about the fuel they burn driving and flying to their protests, but also the products derived from oil and gas that they use every day.
Such as …
- The computers they use to rally the troops
- The phones they use to record their protests
- The markers they use to make their signs
- The pens they use to gather signatures
- The clothes and shoes they wear to the protests
- Even the satellites that provide the GPS system they need to find directions to the next divestment “action” (or play Pokemon Go)
The truth is that they can't "divest" themselves from oil and gas products because it's nearly impossible to live in the modern world without such products.
Verdict: GROUNDED IN FOLLY
I’ve heard that traditional fuel companies are no longer good investments, because much of their supply will become “stranded assets.”
This argument has been put forth as a way to counter an uncomfortable truth: divesting from oil and natural gas stocks is a terrible financial decision. It costs portfolios money both in trying to disentangle fuel stocks from other stocks and in lost income from a traditional “blue-chip” industry.
But if you want to talk about stranded assets, consider what would happen if the divestment campaign succeeded oil and natural gas were truly persecuted to the point of not being able to keep up with demand:
- Apple would be left with empty factories and unpaid workers, since iPhones and iPads depend upon petrochemicals to function
- Airlines would have jets rusting on the runways, unable to fly without the jet fuel that carries millions of Americans across the country—and around the world—each year
- FedEx and UPS would have fleets of unused trucks if they lacked gasoline
- Farmers’ crops would rot in the field without the fertilizers, irrigation systems, and harvesting machines that make America such an efficient food-producing nation.