Eight myths about fossil fuel divestment

I’m giving a little talk at a fossil fuel divestment teach-in at Amherst College on Friday. There is an important way that the Potwine Passive House fits into the conversation, so I thought I would share my thought process here.

The concept of divestment is simple: don’t invest in the fossil fuel industry. The rationale is simple: don’t support a destructive and corrupt industry. Beyond the simple concept, a whole host of brilliant cascading effects lead me to believe that divestment is a great way to jump start the transition to a clean energy economy.

The complication arises when you factor in the industry-sponsored noise and misinformation that always overwhelms these types of political conversations. To counteract that noise, I started by trying to understand the points made by the industry in opposition to divestment. Then I compiled a top ten list of myths that seem to form the basis of that opposition.

Myth #1: It’s your fault, not the oil and gas industry’s

Who’s using electricity right now surfing the internet? Who drove around today, greedily burning fossil fuels? It wasn’t the oil and gas industry: they are simply providing a product that you want.

In fact, the public is not entirely responsible for our fossil fuel usage. It is true that we are all using dirty energy, but we don’t have a legitimate choice. The electricity and transportation infrastructure simply doesn’t exist right now to provide a fair choice between competing sources of energy.

Consider the paradox of Microsoft Office, a dominant product that is widely condemned and hasn’t improved in decades. It maintains its position in the market not by its merit, but by its ubiquity. We all use Microsoft Office even though there are more innovative alternatives (and have been for years) that would improve our lives and make us more productive, yet we can’t switch because it would involve a huge personal risk or inconvenience.

Likewise, the oil and gas industry offers a product that is scientifically proven to be causing irreparable harm, and yet we can’t switch to alternative energy sources — not because there aren’t better solutions, but because we are saddled with an entrenched fossil fuel infrastructure: our roads are made for cars, not bicycles; your building is heated with fossil fuels regardless of how much you turn down the heat; and if you wanted to buy clean electricity for your home, you would have to pay more.

Myth #2: Fossil fuels benefit society

Look around at the amazing achievements of civilization: hospitals are using electricity to cure people; buses are using gasoline to drive kids to school; construction workers are being hired to build pipelines; and so on. You want to destroy our economy and put innocent people out of work by making it harder to burn fossil fuels?

The perception that societal progress is due to our usage of fossil fuels is incorrect. Fossil fuels are inefficient, destructive and marginal sources of energy, retarding the advancement of society and costing far more than their economic benefit.

Few of us know the depth to which fossil fuel usage is horribly inefficient. The energy efficiency of an incandescent light bulb, powered by a fossil fuel power plant, is only 1%! In other words, 99% of the energy of the natural gas or coal that went into the power plant is wasted as rejected heat, transmission losses from the power plant and heat loss in the light bulb itself. Likewise, the energy efficiency of a gasoline powered car is only 1%! In other words, 99% of the energy of the oil that goes into the gas tank is lost in the engine, in accelerating and braking, in friction and in moving the entire car rather than just the driver. These inefficiencies are, unfortunately, largely unavoidable — a fundamental consequence of using heat to propel a generator or an automobile engine.

Not only is fossil fuel usage much more wasteful than most people think, it’s also one of the greatest public health threats on the planet. The combustion process releases small particulates and toxic impurities bound up in the raw fuel stock, causing disease, cancer and ultimately leading to 50,000 deaths each year in the United States alone and $150 billion in health costs each year. An economic analysis found that the health impacts of coal electricity cost society twice as much as the value added to society.

Myth #3: We can’t live without fossil fuels

It’s useless to lament the inefficiency and widespread public health threat of fossil fuels because no form of renewable energy can support our lifestyle or lift the world’s poor out of poverty.

In reality, the technology exists to dramatically reduce how much energy we waste, and the available wind and solar energy resources are sufficient to fill the remaining gap. LED lights powered by solar electricity are nearly 80% efficient, 80 times more efficient than an incandescent light bulb. Electric cars are nearly 10% efficient, ten times more efficient than a gasoline powered car. An electric heat pump is twice as efficient as a gas furnace. These huge efficiency improvements are mostly due to the fact that electron-based technologies are not subject to the same heat losses of combustion-based technologies.

Even more improvements in renewable energy and storage technologies are on the horizon, and will certainly help in the future, but they are not essential today. We are living in an exciting time where many long sought after renewable and efficiency technologies are rapidly maturing. The cost of renewable energy has already fallen dramatically as it reaches scale. In Texas, solar electricity is cheaper than natural gas electricity. In Massachusetts, the return on investment for solar panels is twice that of the stock market.

To help prove the point, I am building an affordable home that doesn’t use a single drop of fossil fuels, and will be powered entirely by the sun. A remarkable combination of solar heating, efficient components and super-insulation help reduce the energy consumption of the home by a factor of 8 compared to the average Massachusetts home. Because the home is so efficient, solar panels cover only a small fraction of the roof area, leaving plenty of room for extra solar panels to charge an electric car. Using so little electricity, backup battery systems are economically feasible, allowing the home to be disconnect from the transmission grid, an expensive source of inefficiency.

Underlying the home’s astonishing energy savings is the Passivhaus design method, an assortment of techniques, technologies and guidelines needed to obtain such a high level of efficiency. The Passivhaus method is not a crazy unproven idea: decades of research underpin the method; tens of thousands of successful homes and buildings have already been built; and, in many cities in Germany, the standard has been adopted as the building code. These tremendous energy savings can be obtained in nearly any building, often saving costs in the long run. My biggest surprise with the project has been that going zero energy isn’t the hard part. Making decisions without adequate information, following up on loose ends, planning, communicating, getting permitting and getting a loan were the difficult parts. Making the home zero energy was easy. As long as you commit to it, living without fossil fuels is easy.

Myth #4: Existing institutions will lead the way

You’ve seen the commercials. Chevron, ExxonMobile, BP are investing millions in alternative energy. Your utility company is helping people weatherize their homes. Your college is building a LEED certified building. Our institutions have made us into a great country and they will lead the way to clean energy.

The simple fact is that few large governmental, educational or corporate institutions are investing aggressively in renewable energy and energy efficiency. Investment in renewables is typically more of a public relations tactic than a truly disruptive mobilization. Most energy companies invest less than 1% of their expenditures on renewables. There is no evidence that all those LEED certified buildings on campus actually save energy.

Our institutions are not willing to invest in renewables and energy efficiency for the simple reason that they are accustomed to and reliant on fossil fuels and therefore have no incentive to lead the shift to renewables. History tells us that large organizations are often incapable of quickly pivoting in a new direction. We cannot depend on them to willingly give up revenue, retrain their work force, or overhaul their operations for the greater good of the planet — unless they are compelled to do so.

Myth #5: Don’t blame people in the oil and gas industry

Many hardworking folks are employed by the oil and gas industry. It is unfair to blame them for the unanticipated side effects of fossil fuels and the failure of solar and wind to economically compete with fossil fuels.

Here, we should be careful to distinguish between employees who are doing nothing wrong and decision-makers at the executive level who are knowingly stifling renewable energy by lobbying against renewable energy and energy efficiency incentives, lobbying against public transportation, lobbying against oil and gas regulation, securing lucrative tax breaks and subsidies, and creating a vast network of think tanks and organizations that spread an incredible amount of misinformation about the science of climate change. There is no legal way to compel oil and gas companies to operate their businesses in an ethical manner. Public pressure, however, can be an effective way to reform an industry.

Myth #6: Divestment won’t make a difference

If colleges and universities divest from fossil fuels, the total sum of those investments will not make a significant difference in the industry’s ability to access capital. No one can honestly believe that the most powerful companies in the world will voluntarily relinquish the trillions of dollars in fossil fuel resources that they control. Publicly traded fossil fuel companies control a small fraction of the world’s proven reserves anyway.

Divestment is not the only step needed to achieve a clean energy future. It is a brilliant starting point, a necessary first step that might actually be able to achieve a goal that is seemingly unattainable. The divestment movement is nominally about the moral authority of colleges and universities. However, a deeper significance exists: the ability to imagine a world without fossil fuels. Eliminating one’s financial dependency on fossil fuels helps break through a powerful psychological barrier: the belief that a dependency on fossil fuels is necessary. This is the true power of divestment. Colleges and universities who divest — and along the way purge industry advocates from their board of trustees and the administration — will be free to overhaul their operations, their curriculum and their research agendas and allocate resources in a way that is commensurate with the magnitude of the climate crisis, the single greatest challenge of our time.

A second goal of divestment is to build a movement that can exert pressure on the fossil fuel industry to stop spreading misinformation and stop altering the political process. Historically, large student movements have provided an effective medium for raising the profile of important issues that aren’t receiving the attention they deserve in the wider public discourse. The anti-war movement gained early traction on college campuses, and more recently the Occupy movement demonstrated how rapidly a student movement can affect the national conversation. Marginalizing the fossil fuel industry’s disinformation and lobbying campaigns will eliminate a crucial impediment to renewables.

The only solution to the climate crisis is to lower the cost of renewable energy below that of fossil fuels, to the extent that fossil fuel reserves are no longer economically accessible. Fossil fuels are global commodities, as are solar panels: a drop in the price of solar panels in a single country will propagate to other countries across the world. Forward thinking pricing schemes for solar energy in Germany over the past decade almost singlehandedly led to the resurgence of the solar industry and an astonishing drop in prices by one half. Over the past couple of years, China has aggressively subsidized its nascent solar industry, cutting worldwide solar panel costs in half again. These price cuts are permanent, a function of manufacturing scaling laws. Imagine what could be done if the fossil fuel industry lifted its strangle hold on the political process in the US.

Myth #7: You must first green your campus

How can a college claim the moral high ground by divesting from fossil fuels while continuing to use tremendous amounts of fossil fuels in its own daily operations?

It is perfectly rational to not eliminate your own consumption while you attempt to change the system that makes it difficult to eliminate your own consumption in the first place.

Myth #8: We can’t afford to divest

In these difficult financial times, when colleges and universities are struggling to cut costs while the price of a college education is at an all time high, it is dangerous to risk the financial stability of the endowment in order to further a single political position. [Similarly, a pre-recession version of this sentiment might have read:] In an increasingly competitive field of colleges, it would be irresponsible to hog-tie our highly skilled financial managers and risk slowing the growth of our endowment, possibly putting the college at a financial disadvantage.

The misconception here begins with the fact that money managers do not simply remove investments from a portfolio — they must rebalance the portfolio by substituting stocks that behave similarly. Energy stocks tend to hold their value better in hard times, so one must find investments that do the same, which is apparently easy to do. In the end, there is essentially no difference between the two portfolios in terms of their returns.