There is a movement afoot to slow the wheels of modern life. A highly emotional, anti-industrial fringe is urging institutions to "divest" -- or sell investments in the oil, gas, and coal industries.
But divestment is a solution looking for a problem. Every American is a prolific fossil-fuel user, and substitutes are limited, expensive, and unreliable. And many -- if not most -- Americans are rewardingly invested in the oil, gas, coal, and electricity industries.
Instead of demonizing fossil fuels, America's institutions need to embrace them and welcome a consumer-driven, taxpayer-neutral, free-market energy future.
Unfortunately, the list of emotional sellers is growing. Since 2012, the divestment campaign has expanded to more than 220 colleges, faith organizations, pension funds, and other institutions.
Syracuse University recently announced its intent to redirect the fossil-fuel portion of its $1.2 billion endowment to "clean energy" investments. Stanford decided last year to cease all direct investments in companies engaged in coal mining. Oxford University stated that it will not invest in companies that mine coal or heavy oil.
But the divestment fuss is long on emotion and short on evidence. Those who say we are running out of oil, gas, and coal are wrong. By 2017, the United States will be a net exporter of natural gas. On the oil side, today's net imports of 25 percent -- significantly down from the peak of 60 percent in 2005 -- are forecast to fall to 14 percent by 2020.
And environmentalists exaggerate the effects of fossil fuels on the environment. Since 1970, aggregate emissions of the six main pollutants -- including carbon monoxide, lead, and sulfur dioxide -- have dropped by more than two-thirds. Moreover, global warming has nearly stalled since the late 1990s, and modest increases are well below model forecasts.
Instead of bowing to exaggerated costs of fossil-fuel reliance, universities should appreciate the benefits of oil, gas, and coal.
University investments in fossil fuels boost endowments. A Sonecon study found that investments by college endowments in the oil and gas industry produced the highest returns of any other asset class. Between 2006 and 2011, oil and gas stocks generated yearly average returns just under 8 percent. That was 172 percent higher than the average returns for all U.S. stocks.
According to the National Association of College and University Business Officers, university endowments hold an estimated $23 billion in energy stocks. Revenues generated from these investments support financial aid packages, professors' salaries, and new infrastructure.
According to Daniel Fischel, former head of the University of Chicago's law and economics program, a $100 invested in an optimal portfolio in 1965 would yield $14,600 by 2014. But a fossil-fuel-divested portfolio yielded only $11,200 -- a shortfall of 23 percent.
In other words, divestment threatens to compromise and shrink university endowments. That translates into less financial aid, and thus less opportunity, for students.
Instead of vilifying the fossil fuel industry, colleges and universities should welcome it.
"The divestment impulse recognizes no limiting principle," George Will noted several months ago. He fears "shedding investments tainted by involvement with Israel, firearms, tobacco, red meat, irrigation-dependent agriculture, etc." where "progressivism's dream of ever-more-minute regulation of life is realized but only in campus cocoons."
The divestment craze must end so nonprofits will not have to choose between expanding educational opportunity and kowtowing to a futile political crusade.
Robert L. Bradley Jr. is the founder and CEO of the Institute for Energy Research.