Introduction to Fossil-Fuel Divestment

Energy is the lifeblood of modern society, but there is a new movement to halt our use of energy and the products of modern life as well—the fossil-fuel divestment movement. These activists seek to pressure individuals and institutional investors to “divest” of stocks, bonds, and other investments in natural gas, oil, and coal companies. This morally bankrupt movement is trying to keep billions of people in poverty, deny people access to energy, and forbid access to the lifesaving products that come from coal, natural gas, and oil—including steel, plastics, and pharmaceuticals.

Divestment Threatens Modern Life and the Potential to Achieve a Better Life

The energy we use in every day life comes from a variety of sources, but some play a bigger role than others. Natural gas, oil, and coal—the sources of energy the divestment movement wants to divest from—make up 82 percent of all the energy Americans use. Two-thirds of the electricity we use comes from coal and natural gas, and 95 percent of our transportation fuels come from petroleum.

While most Americans have access to energy, according to the International Energy Agency, “globally over 1.3 billion people are without access to electricity and 2.6 billion people are without clean cooking facilities.” Natural gas, coal, and oil offer some of the most cost-effective ways to expand energy access for these people. But the divestment movement wants people to divest from these energy companies, making it more difficult to expand energy access to the poorest of the world’s poor.

But it’s not just about energy. Coal, oil, and natural gas are used for far more than just energy. Besides generating electricity and providing heat for people’s homes, natural gas is used to make fertilizer, pharmaceuticals, plastics, fabrics, and many more products. Besides generating electricity, coal is used to make steel, concrete, soaps, aspirins, plastics, carbon fiber, and more. Besides creating transportation fuel, oil is used to make chemicals, plastics, asphalt, lubricants, wax, and much more.

By urging people to divest from the stocks of natural gas, coal, and oil companies, the divestment movement is not only trying to divest people from the energy from these sources, but from the products as well. For instance, the naïve might think that divesting from coal stocks only means ending coal for electricity generation, but it also means divesting from stainless steel as well. This means divesting from stainless steel water bottles like the Klean Kanteen.

Divesting also means that our roads will worsen because it means divesting from the companies that produce not only asphalt, but also concrete. And how will bridges be built without steel?

Divestment also means divesting from carbon fiber—so no more high-tech bicycles. It also means no more polyester and nylon, such as is used in Patagonia’s outdoor gear, which comes from natural gas. The list goes on.

In other words, divestment activists want us to turn our backs not only on the energy we use in every day life, but on the steel, plastics, carbon fiber, and other products of modern civilization as well.

Scale of Global Energy Demand

Taken to its logical conclusion, divesting from natural gas, oil, and coal would consign billions of people around the world to a lifetime of poverty. The world’s energy needs are vast and growing: global energy demand is expected to rise 37 percent by 2040, while 1.3 billion people around the world currently lack access to electricity. The world needs more energy, but divestment activists demand us to use less energy, or at least less of the only sources of energy that can meet our needs. That is a recipe for energy poverty.

Looking Ahead

In less than two weeks, divestment activists will hold a “Global Divestment Day” to push their radical cause. It’s why the American Energy Alliance has launched this Divestment Tracker to highlight the benefits of traditional energy sources and the threat posed by divestment activists. Although “Global Divestment Day” (or perhaps more aptly, “Energy Poverty Day” or “Stone Age Day”) will come and go, divestment activists and their harmful philosophy are not going away quietly.

That’s why, in the coming days, AEA will be providing a series of educational articles related to the divestment movement. Forthcoming topics include: explaining the positive role of natural gas, oil, and coal to every day life; assessing the claims, history, and goals of divestment activists; and highlighting the scale of global energy demand. We hope this page can serve as a useful resource for anyone who wants to fight for energy freedom. Stay tuned!