Fossil fuel divestment crusaders at major universities are probably in for a rude awakening as oil and gas assets are tied to nearly every sector of a university’s endowment, according to one an economic analyst who researchers the costs of divestment.
“Divesting from fossil fuels is an incredibly complicated undertaking,” Todd Kendall, an economist with economic consulting company Compass Lexecon, told a panel on hosted by the American Fuel & Petrochemical Manufacturers on Wednesday. “What makes it so complicated,” he added, “is that oil assets are literally tied to every sector of the economy, not to mention every asset of a university’s endowment.”
It’s like “seven degrees of Kevin Bacon,” Kendall told those in attendance, in that some assets are from financial institutes that give loans to oil companies, while still others are tied up in technology firms that, among other things, develop tools that help distribute oil from one place to another. It’s like trying to toss a boulder in a glass factory without shattering a window vase — the probability of success is almost nil.
The assets are indirect, for sure, he said, but they are nonetheless linked to the oil industry.
Kendall, who co-researched a study in May explaining the “hidden costs” of divestment, told The Daily Caller News Foundation in early June that environmentalists have dramatically downplayed the costs of fossil fuel divestment.
“If fixed costs are factored into divestment,” Kendall said at the time, “then the price of purging fossil fuels balloons to more than $7.4 billion for most major universities with sizeable endowments.”