Bid to Divest from All Oil and Gas Companies Fails

Barbara Boigegrain, General Secretary of UMC Pension Board. Photo By Maile Bradfield, UMNS.

Barbara Boigegrain, General Secretary of UMC Pension Board. Photo By Maile Bradfield, UMNS.

By Walter Fenton-

A somewhat overlooked, but important message from the 2016 General Conference was the delegates’ decision to reject a petition calling on The United Methodist Church’s General Board of Pension and Health Benefits (GBPHB) to divest from all fossil fuels.

After vigorous debate, delegates voted nearly two to one against a plan pushed by the advocacy group Fossil Free UMC. The plan was also rejected in committee, with only 14 delegates supporting it and 41 opposed.

The Rev. Jenny Phillips, a representative of the group, argued that by divesting the UM Church would serve as a witness to countries that recently signed the Paris Agreement on climate change.

Barbara Boigegrain, general secretary of the pension board, countered that the more effective witness would be for the church to remain invested in the companies. Remaining so, she said, gives it a “voice at the table” to advocate that as companies extract oil and gas they do so in ways that minimize harm to the environment.

The pension board has established guidelines for responsible investing, and does not invest any funds in certain industries. It has no holdings, for instance, in alcohol, munitions, pornography, private prisons, or tobacco.

While Fossil Free UMC’s concern for the environment is laudable, its call for complete divestment from all oil and gas companies is misguided and ill conceived.

For the foreseeable future, fossil fuels will be part of an integral mix in meeting the world’s energy demands. If U.S. companies do not extract oil and gas it will be extracted elsewhere. And elsewhere is often in countries where environmental regulations are not as strict and the regulations that do exist are lightly enforced.

Furthermore, it is better for the environment when oil and gas is extracted in countries with a robust private sector and market based economies. When oil and gas extraction is monopolized by a state the results are often disastrous. At best the states are inefficient in their methods of extraction and slow to institute the industry’s best practices. At worst, such nations become kleptocracies, where a ruling elite garners nearly all the profits, and leaves its people and neighboring countries suffering from environmental hazards and the destabilizing governments they become.

GBPHB has a challenging task. It is charged with the responsibility of investing funds so clergy and church employees have pensions that allow for a decent retirement, but it must invest in ways that conform to Scripture and the ethical standards we derive from it. The General Conference delegates were wise to recognize that the best way to help the board meet its challenge was to reject the call to divest from all oil and gas companies. And their decision was best for the environment as well.

Walter Fenton is a United Methodist clergyperson and analyst for Good News.

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