Fossil fuel divestment has become a tactic for going on offense against climate change. So why won’t San Francisco join the fight?
• Tom Molanphy, Thu Feb 1st, 2018 7:00am
Picture a postcard-perfect San Francisco evening. The sun drops behind the royal span of the Golden Gate Bridge, lighting up the smooth Pacific, the mystical Farallones, and … an 80-foot-high oil rig.
Interior Secretary Ryan Zinke’s announcement of a 5-year leasing plan — that would commit 90 percent of the nation’s offshore reserves to oil leasing, including California’s — could make this postcard a reality. But it’s an image that San Francisco Supervisor Aaron Peskin, also a member of the California Coastal Commission, is determined to prevent.
“This is a dying industry,” Peskin tells SF Weekly. “All 12 members of the California Coastal Commission are united to stop the insane agenda of the oil industry.”
San Francisco had the opportunity to fight that agenda last Thursday. But the Retirement Board of the San Francisco Employees Retirement System (SFERS) voted, once more, not to divest approximately half a billion dollars from their fossil fuels portfolio. Although the SFERS board agreed to re-evaluate “risky” stocks in approximately 200 fossil fuel companies, it declined to divest completely, despite being asked to do so in a unanimous resolution by the Board of Supervisors as far back as 2013.
“While we look for $5 billion to fund repair to our seawall, the Retirement Board’s desire to work more closely with the dirtiest energy companies is naïve and offensive,” Peskin said in a statement last week.
Started by students at Swarthmore College in 2010 and promoted by environmental activist Bill McKibben, fossil fuel divestment strategies representing more than $1.5 trillion in assets have been pledged, according to 350.org. High-profile pledges have come in from Norway’s Sovereign Wealth Fund, the Church of England, and San Francisco’s California Academy of Sciences. On Jan. 9, New York City Mayor Bill de Blasio pledged his city would divest about $5 billion from fossil fuel companies.
In addition to divestment, Peskin and other environmental leaders believe litigation against oil companies will play a key role in the battle against climate change. Last December, San Francisco City Attorney Dennis Herrera filed a lawsuit against the top five oil and gas companies, following in the footsteps of Oakland, New York, and other cities.
Those who support SFERS’s decision to keep these fossil fuel assets argue that these investments are strong in the long run, and that the SFERS board has a fiduciary obligation to choose the best long-term assets for their retirees.
NextGen America President Tom Steyer disagrees.
“Linking the financial stability of city employees to a dying industry that threatens our health and our climate is not only financially short-sighted, but morally indefensible,” Steyer said in a statement.
Supporters of divestment argue that these Big Oil investments, under stress of litigation, will weaken the way that Big Tobacco investments did years ago.
Peskin agrees. “It’s very much like Big Tobacco,” he says. “Tobacco industries knew how bad tobacco was for people’s health, which was why litigation against tobacco companies was so successful.”
As far as the unsettling image of an oil rig off of Ocean Beach goes, divestment, along with protracted litigation (to stall oil companies from drilling through lawsuits, for example) and the increasing affordability of alternative energy, could impact the available resources of oil companies to expand operations, similar to how these strategies weakened and limited coal companies. It’s why local business leaders and environmentalists want Bay Area residents to take Zinke’s threat of drilling seriously.
“It’s hard to imagine there are recoverable volumes of oil offshore,” John McManus, executive director of the Golden Gate Salmon Association, tells SF Weekly. “But even if there were, the federal government should take a long hard look and wonder what would happen if there was ever an accident like Deepwater Horizon off the California coast.”
And if there was an oil leak, the effects on local marine life would be catastrophic. “You can’t pull salmon through a layer of oil to get them in the boat,” McManus says. “Plus, oil degrades, sinks to the bottom, and wreaks havoc on all the sea life on the ocean floor.” Dungeness crab, sea urchins, halibut and shrimp that share the seafloor would be all but wiped out because of such a spill, according to McManus.
With that loss, local industries would also collapse. According to Sandy Aylesworth, an oceans advocate for the Natural Resource Defense Council, California’s ocean economy — which includes tourism, recreation, and fishing — is worth $42 billion.
“If you look at California policies, the state is very committed to growing its low-carbon green economy. Offshore drilling would fly in the face of that clear commitment,” she tells SF Weekly. “And there is clearly an urgent need to transition from fossil fuels towards a clean energy future. Investing in antiquated fossil fuels sends the wrong signal and jeopardizes our chances of preventing the worst impacts of climate change.”
In light of the Trump administration’s aggressive support of the oil industry, which included opening up a pristine section of the Arctic Refuge for drilling in the recent tax plan, divestment from oil companies is emerging as a real way to take the fight to Big Oil.
But transitioning from a petroleum-based economy isn’t as simple as dropping some stock in oil. Petroleum products are in almost everything we use, from the food we eat to the phones we charge. Transitioning from fossil fuels would be a radical shift in the global economy — perhaps even as radical as the discovery of oil itself.
“I understand we live in a petroleum world,” Peskin says. “But it is the existential issue of our time. Time is of the essence. Real and symbolic action has to happen, or we are all screwed.”