State investment boards in Washington and Oregon are “bankrolling” oil, coal and gas infrastructure, a new analysis asserts, despite public calls by those states’ governors to shift to renewables to fight global climate change.
The analysis, conducted by Sightline Institute, a Seattle-based environmental think tank, centers on the Washington state Investment Board and the Oregon Investment Council. The two agencies manage billions of dollars for public employee pensions and retirement accounts.
“The governors of each state have voiced strong concern about — and even outright opposition to — major fossil fuel infrastructure projects,” according to Eric de Place and Nick Abraham in their analysis released Wednesday. But while Washington Gov. Jay Inslee and Oregon Gov. John Kitzhaber “preach a sustainable future for our region, another wing of the executive branch is quietly betting public money on a vastly different vision.”
Responding to the analysis, Theresa Whitmarsh, executive director of the Washington state Investment Board, said the board is an independent agency — not a member of the executive branch — that has a strict fiduciary responsibility to make money for its beneficiaries. Nevertheless, Sightline isn’t the first group to raise concerns about fossil-fuel investments and climate change, Whitmarsh said. And the investment board today is expected to consider adopting guidelines that encourage sustainable investing, and that support greater disclosure of corporate practices and risks in light of climate change.
“This is an issue of great concern to certain of our beneficiaries,” Whitmarsh said. “They have come and presented some of their views to the board.”
The Sightline analysis underscores several investments by the Washington and Oregon investment boards in funds that support projects to move and transfer fossil fuels. In December 2012, for example, the Washington board invested $250 million in the Stonepeak Infrastructure Fund, which funded Vancouver-based Tidewater Transportation and Terminals, according to the Sightline report. Tidewater subsequently signed a deal with Ambre Energy to barge coal from Boardman, Ore., to Port Westward, Ore., for its proposed Morrow Pacific coal export project, the analysis says.
The Sightline investigation arrives amid a nationwide campaign by climate change activists to prod governments and universities to unload stock in coal and oil companies from their investment portfolios. At least 11 small universities have chosen to dump fossil fuel stocks from their endowments, The New York Times reported in May. That same month, Stanford University said it would divest its $18.7 billion endowment of stock in coal-mining companies. It was the first major university to back the divestment campaign, according to The Times.
‘Difficult and costly’
Although the Washington investment board is mulling new investment guidelines, it rejects the call to divest from fossil fuel stocks. In a statement to The Columbian, Washington state Treasurer James McIntire said most of the investment board’s contributions are “externally and passively managed,” so it would be a “difficult and costly exercise to divest.” He added, “But more importantly, once you sell your stock, you’ve lost your voice and any influence you had in the way the company is being managed.”
The Sightline analysis notes that significant increases in oil-train traffic, explosive derailments and proposals to build coal and oil-by-rail transfer terminals in Washington and Oregon have raised public safety concerns and triggered public opposition. Yet “large quantities of public money fund the very same facilities so bitterly opposed by the taxpayers that the states are supposed to be investing for,” the analysis says. In Washington, the investment board’s decisions include:
• Indirectly financing Ambre’s Morrow Pacific coal export project by investing $250 million in the Stonepeak fund, according to Sightline.
Last month, Oregon’s Department of State Lands denied a key permit for Ambre’s plan to export roughly 8 million tons of coal annually to Asia. Subsequently, the U.S. Army Corp of Engineers put on hold its review of Ambre’s proposal. Ambre has appealed Oregon’s decision.
• Investing, through the Stonepeak fund, in the Casper Crude to Rail facility in October 2013. “This Wyoming-based project is a major oil shipment hub moving mostly Bakken shale oil, the volatile crude involved in numerous oil train explosions,” the analysis says.
• Investing $250 million in Global Infrastructure Fund II in 2012. “A major component of this fund’s portfolio was the Ruby Pipeline, a Kinder Morgan project to ship natural gas from Wyoming to the West Coast,” according to the analysis. “The Ruby Pipeline would deliver gas to a pipeline hub at Malin, Oregon, from which it would be moved to a controversial liquefaction and export site planned at Coos Bay, Oregon.”
As to the Oregon Investment Council, the analysis says the council’s fossil fuel investments include:
• Putting $100 million, in 2012, “into the same Stonepeak” fund to which Washington’s investment board contributed.
• Helping finance, in 2013, Global Partners’ acquisition of an oil train facility at Port Westward on the Columbia River. Michael Cox, spokesman for Oregon state Treasury, responded to the Sightline report in a statement: “The financial health of our pension fund and other investments matters to every Oregonian. They financially benefit our taxpayers, schools, communities, and retired public employees. The most effective role for the Oregon Treasury is to continue to demand responsible business practices and use our influence to push for the development of profitable investment opportunities in the clean energy sector.”
