As New Yorkers continue to shiver their way into the New Year, they can take cold comfort (pun intended) from the knowledge that their betters presiding in Albany and the five boroughs are preparing to strike a blow against the forces said to be responsible for…global warming.
After bundling up to protect himself from the icy cold that still holds New York and much of the country in its iron grip, Gov. Andrew Cuomo (D) entered the State Capitol building in Albany in early January to deliver his “State of the State” address, in which he proclaimed his support for expunging all fossil-fuel companies from the New York State Common Retirement Fund, the state’s pension fund. Not to be outdone, New York City Comptroller Scott Stringer has announced he will do the same with the pension fund he manages.
Together, the two funds are worth about $390 billion. The State Common Fund contains more than 50 oil and gas companies. These companies are there, because they deliver a sound return on investment, and this money makes its way into state retirees’ pensions.
That’s not the way the governor sees it, though. Saying “the Common Fund remains heavily invested in the energy economy of the past,” Cuomo believes moving the fund “away from fossil fuel investment will protect the retirement savings of New Yorkers.”
But his assumption that oil, coal, and natural gas represent the past is without merit. Data from the International Energy Agency and the U.S. Energy Information Administration show fossil fuels comprising over 80% of energy consumed worldwide. China is happy to sell cheap solar panels to the U.S., but is staking its energy future on coal. And as India strives to bring electricity to hundreds of millions of its people still without power, wind turbines are not on the wish list.
In short, demand for fossil fuels is growing worldwide, and depriving pension funds of companies capable of delivering that energy to global markets is playing Russian roulette with New York’s pensioners. State Comptroller Thomas DiNapoli, who manages the Common Fund, may want to think twice before signing up for Cuomo’s divestment scheme.
As for the governor, he is widely believed to have ambitions that go far beyond Albany, so ingratiating himself through climate theatrics with deep-pocketed green donors in Silicon Valley and elsewhere could be good for his political future.
In his quest for green accolades (and money), Cuomo has, through his fracking ban, already denied landowners in the economically depressed Southern Tier access to the vast resources of natural gas lying beneath their feet. And he has blocked construction of two proposed natural gas pipelines through New York: the Constitution Pipeline in 2016 and the Northern Access Pipeline in 2017.
Oil and natural gas have been Cuomo’s primary targets, whether as energy sources for New Yorkers or as part of the state pension fund’s portfolio. But the frigid temperatures that have plagued the Empire State have been a timely reminder of just how important reliable sources of energy are in a crisis. As temperatures plummet, and demand for heat soars, stress is put on power plants to deliver electricity at an affordable price.
In nearby New England, residents were protected from the bitter cold by power plants switching to oil to meet demand. Also coming to the rescue were recent additions to New England’s downstream natural gas network – notably the startup of service at Spectra Energy’s Algonquin Incremental Market – which helped contain price spikes in the region’s power markets.
When push came to shove, fossil fuels — not wind turbines and solar panels — saved the day.