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Adele Franks: Fossil fuel stocks a losing proposition for public

Silhouette of factory at sunset

Silhouette of factory at sunset

When I raise the issue of getting public funds out of the fossil fuel industry in conversation, however, some people stare blankly at me, or raise puzzled eyebrows, demanding explanation. So, here is the rationale, as my colleagues at 350 Massachusetts and I see it.

First, the fossil fuel industry essentially steals from the public by shifting its business expenses onto us. It makes huge profits but does not pay the true costs for the environmental destruction it creates (removing mountain tops; chopping down miles of boreal forest; poisoning groundwater and streams; despoiling coastlines; polluting air). It does not pay for the illnesses it causes. It does not pay for the carbon it discards into the atmosphere, accelerating climate change. It does not pay for the impact of climate disruption on our communities, including property damage and crop loss resulting from increasingly violent storms. Communities pay the true price for all these harms.

Second, fossil fuel companies use their profits to buy influence on state and federal governments and use that influence against the public interest. Their political power assures them unfair advantage to continue to dominate the energy market with dirty energy, at a time when we desperately need to transition to clean, renewable energy. Moreover, the industry uses its political power to lobby against needed clean energy incentives. The fact that the fossil fuel industry receives government subsidies, which effectively add to its profits, rubs salt in this wound.

Third, the industry denies that it fuels climate change. It fails to acknowledge that 80 percent of known fossil fuel reserves cannot be burned without sending average global temperatures spiraling beyond the 2 degree Celsius (3.6 degree Fahrenheit) limit for maintaining a habitable planet.

Fourth, fossil fuel is a risky investment, as economists predict that the “carbon bubble” will burst. When 20 percent of existing fossil fuel reserves have been nearly burned and climate disruption drastically worsens, the burning of fossil fuels will have to be dramatically curtailed, and the value of companies’ assets will plummet. Meanwhile, studies show that alternative investment strategies have equivalent returns.

Fifth, it is incongruous for the commonwealth to invest public funds in an industry so at odds with our values and our priorities. Massachusetts is a leader in promoting clean energy and clean technology. Why would we invest in an industry that undermines our efforts to transition to a clean energy economy?

Here’s what I believe divestment will accomplish: Drawing attention to the ways the fossil fuel industry works against our best interest will reduce the industry’s political power. Divestment is one important part of such an effort, much as it was in reducing the credibility, and political influence, of tobacco companies in the 1990s.

For this reason the fossil fuel divestment movement is gaining momentum — at this count at least 14 municipalities, five colleges in the Northeast, one national religious denomination and local congregations have pledged to take money out of fossil fuels and reinvest it in ways more in keeping with their values and moral principles.

If we do not act to diminish the nefarious political power of the fossil fuel industry, and transition rapidly to clean energy, our future looks grim. I am proud that Northampton’s City Council and Mayor David Narkewicz set an example by urging gradual divestment of Northampton’s funds from fossil fuels and endorsing the bill that will do the same statewide.

It is crucial for citizens to encourage their state legislators to support this bill. Enacting S. 1225 will make it clear that Massachusetts will not invest in a deadbeat industry that undermines our efforts to build a safe, clean energy future.

Adele Franks is a retired public health physician who lives in Florence. Information about S. 1225 can be found at 350MA.org.

Legacy Comments19

The following is a list of the top 3 corporate income tax payers (as of 04/01/13) 1. ExxonMobil Income tax expense: $31 billion Net income: $45 billion Effective tax rate: 39% 2. Chevron Income tax expense: $20 billion Net income: $26 billion Effective tax rate: 43% 3. Apple Income tax expense: $14.2 billion Net income: $41.7 billion Effective tax rate: 25% Source: http://www.forbes.com/pictures/mef45kghl/which-corporations-pay-the-highest-taxes/

Nice try. "Income tax expenditure" as reported by oil companies is a misleading term that includes taxes paid to foreign governments for oil concessions and and excludes a number of tax credits. Big surprise, oil exploitation involves expenses that microsoft doesn't have. Wanna know where you can see that factoid? "Taxpayers for Common Sense," a nonpartisan site. It has fewer pictures than the Forbes slideshow you posted, so I understand if it'll be harder for you to navigate.

Nice try, you are referring to the effective tax rate. Income tax is a real number.

Aren't the left's two favorite companies, Apple and Google, paying 0% tax rates because they funnell all their profits to their Ireland subsidiaries? Doesn't Apple make all its money from Chinese slave labor basically (we won't even talk about the pollution we export to China so we can have out cheap little gadgets)? I hope you're not working on a MAC or Ipad or own an I-phone Pascual. But I guess because Verizon is very unionized and gives tons of money to the democrats we will never see democrats go after Apple or Verizon. And of course Google is the partner of the NSA in reading all our emails and giving them all our search results. Why isn't the author advocating selling Google and Apple? She probably owns a MAC and drives a Prius. We know the type. No - its the big old bad oil companies that are destroying the world she says, as she's filliing up her gas tank on her way to Boston for a confernence before jetting off to Australia (ie. to vist Jill Conway perhaps). We know the type.

Wrong again (as usual). First of all, if by "real number" you mean the actual number reported on your little slideshow, that is "income tax expenditure" is exactly the misleading figure to which I refer. Seriously, take a deep breath and read your slidewshow. The terms used are "income tax expenditure" (a "real number" but also an accounting term), "net income" and "effective tax rate." For the relationship between the three terms , see below. The mythical 40-percent-ish figure that is reported by various companies is calculated BASED ON the "income tax expenditure" figure, which includes these foreign taxes. Comparing that to companies that do not have to pay oil concessions to foreign govt's because they are not primary resource extractors is comparing apples and oranges. Also does not account for other subsidies and credits. http://www.taxpayer.net/library/article/myth-v.-fact-oil-and-gas-companies-effective-tax-rate Maybe you are just trying to say that "These companies pay a lot of taxes"? Ok they do, but they also make a lot of money. Some of the taxes they pay are part of the business of extracting resources from the foreign countries where they drill, which is a part of the risk and expenditure of business and not some unfair punishment being meted on them by the federal overnment. So, that would be a very silly argument. I'm giving you the benefit of the doubt and assuming you are trying to make more of an argument about accounting.

"They pay a lot of taxes, Ok they do"

Wow, so you really WERE trying to make that remarkably obvious and spurious point about them paying taxes with all your data posting. Remind me to never overestimate your intelligence again. We all pay taxes, jdurf1, and hopefully proportional to our income. And the oil companies' payments are nowhere near as dis-proportional to their income as they keep trying to claim. So please, don't pretend that they're victims. They'll do just fine even if municipalities decide that they want to make a political statement by divesting in them. So I really don't get what you were trying to say at all. Hey, but you quoted me out of context, and that's actual progress! If you keep cutting and pasting from my comments and those of other people you disagree with, maybe you'll actually post something halfway intelligent someday. Here's hoping!

Apologies, while trying to simplify so as to not to expose your additional pair of chromosomes I thought that citing from an article titled "Which Corporations Pay the Most Taxes" would be self explanatory.

Yeah, that was a real clever retort from a clearly brilliant person. Let's be clear here, your " argument" is basically "oil companies are not evil because they pay lots of taxes." That's an infantile response to the more nuanced--albeit debatable--content of Franks' commentary. Your contribution to this thread amounts to responding to someone saying "I disagree with bob's political views" by saying "Yeah, but bob sure smells nice, so you're wrong." Thanks for keeping it simple by offering me something with a title, but since I try to read past the title, I was trying to comment on the content of what you posted and why that was misleading. Some of us are clever enough to look beyond the simple headlines and other shiny objects that jump out at you and actually analyze the facts behind them. Shhhh. Shhhh. It's ok. Eat your pudding cup. Here's a juice box.

Yikes, and I just missed your potentially offensive "chromosome" reference. Let me be very clear that my pudding and juice box quip refers to the fact that you are like a child (what 5-year-old doesn't love pudding?). I don't think it's nice to use references to mental handicap as an insult.

Unlimited hypocrisy.

I'm still recommending fracking companies like Canadian Oil Sands (COS.TO). Trades on the Toronto exchange. I'm going to make a fortune! So now if this lady wants to be consistent then she will never use a piece of plastic again (made of oil), get in a plane,car, bus or train (burns oil), take or prescribe any medication (made from petrochemicals), eat food (fertilized with petrochemicals), use the internet or any electicy (powered by oil and gas), or partake in any modern convenience since almost everything we touch involves energy being consumed somewhere along the way. These rich people are so out of touch with the average working person who is more concerned with keeping a roof over their heads and how to get to work but the damage they do is immense.

If you really want to make a difference, you should branch out and post this in the Holyoke Sun or the Srngfld Republican, because you've repeated it here a bunch times. But there might be some folks in Hampden county that still haven't heard your funny little "I'm gonna get rich off of fossil fuels and get back at all of those liberal meanies that ruined my town" fantasy. Is the divestment that Adele Frank suggested here more symbolic than anything else? Yeah, although the "carbon bubble" argument is sort of compelling. Is your rant part of a more general parochial mentality that gets exploited by the Republican party and really has nothing to do with making life easier for "average working people"? Abso-frakking-lutely. (See the pun I just made?)

The Springfield Republican seems to be as far left as the Gazette. I see COS.TO was mentioned favorably by Yahoo. Warren Buffet, of all people, is buying fracking stocks like Suncor, another Canadian fracking company. My point was these people are hypocrites because they take advantage of fossil fuels in their everyday life like the rest of us. This is a perfect example of liberal guilt. Supposedly Obama is going to come out in favor of fracking and the keystone pipeline in time for the 2014 mid term elections. We'll see. http://www.fool.com/investing/general/2013/09/06/should-you-follow-buffett-in-to-this-energy-play.aspx

I didn't mean that posting on the Republican would give you a more receptive audience, I'm saying that you'd have the opportunity to entertain a broader audience. Yes, I, and everyone who is even remotely familiar with the hackneyed arguments that have circulated around this issue for years, knows exactly what you are trying to say. What makes you special is the fact that you accuse people of this "hypocrisy" through this particular power / revenge fantasy. You will never convince anyone, but you give us a fascinating window into the psychology that turns middle-class people into shills for the GOP.

Wow. That last one was a real gem. Do leftists really love Google and Mac? really? Sounds like your tinfoil hat is on to tight. Ask jdurf1 to loosen if for you--if you're not the same person.

By the way, Buffet's purchases in Canadian oil sands have been read by some as essential to saving an industry whose stocks had been "flat" for some time. Like all great investment opportunities, this one has an element of risk that you should be conscious of if you actually have money to spend on this sort of thing. Buffet's decision making involves calculations that are very different from those of a normal person gambling their retirement. Given the nature of the fracking industry, these companies could be one class-action suit or regulatory reform away from a real disaster. Don't do it!

More news on how Global warmng is not happening as predicted by the climate experts (see link below). The world is actually predicted to enter a cooling phase in the next 15 years according to a yet to be released UN study. I predict snow in Santa Monica this winter! Somehow the global warming crowd will still say it proves their case. Heard this morning that if there are no named hurricanes by this coming Thursday it will be the longest time on record without a named hurricane this late in the year. Also, this year had the lowest torando activity on record. All of the global warming predictions said by now we would have Long Island sound somewhere near Springfield and we all would have been swept away in a cat 10 hurricane by now (the original Lina Wertmueller movie of Swept Away - classic - I think I saw that at the Globe Theater before it became the Pleasant St Theater and Soto Soto - another great movie by her even though an admitted communist but she made great movies anyway). http://www.telegraph.co.uk/earth/environment/climatechange/10294082/Global-warming-No-actually-were-cooling-claim-scientists.html

This is hardly news. Credible scholars like Anastasio Tsonis have been publishing data on a cooling trend since at least 2010. Note, however, that these people don't deny the likelihood of anthropogenic climate change, they just point out that there are concurrent processes that also generate cooling cycles and that there is no single warming trend. Climate science is a complicated and evolving field, and obviously too much so to satisfy willfully ignorant minds who expect science to follow the same black or white "gotcha" principle to which our collective political discocurse has been reduced. Which is why, if I had written this editorial, I would have said less about climate change, because even though that was a small part of the overall argument, it is a juicy morsel for the cut and paste crowd. Ive noticed, by the way, that you tend to go back and forth between your investment fantasy and wistfyl remembrances of the Northampton that used to be (Globe Theater, Burger Chef, etc.). Your particular way of relating the local and global says a lot, and is teaching me so much about why middle-class republicans are such loyal supporters of policies whose larger implications they really don't understand. I'll tell you more about that later.

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