At its most basic definition, securities fraud means getting investment in a project or company via the use of false information. Although the public understands securities fraud in most industries, it may very well become a thorny issue for oil and gas companies over the long term.
Mark Campanale of the Carbon Tracker Initiative raised this point at the Intentional Endowments Network conference on divestment in Denver this week, one of the more interesting questions asked publicly about the transition to renewables.
Fraud is possibly a criminal concern on at least two angles: the possibility that oil and gas reserves can be stranded, or that the cost of getting energy out of the ground might far exceed the price you’ll get for it.
The staff of the Carbon Tracker Initiative, which Campanale founded, is focused on introducing these issues to financial regulators in the American and British markets, where most oil and gas is traded.
“When you raise that money, how is that not a form of fraudulent representation?” Campanale asked during a panel discussion focusing on the experiences and long-term strategies of divestment.
Also on stage were Ellen Dorsey, executive director of the Wallace Global Fund, as well as Tom van Dyck, vice president of SRI Wealth Management, Ira Ehrenpreis of Technology Partners, and John Powers, the founder of the Alliance for Sustainable Colorado.
Geraldine Watson, VP of finance at the Rockefeller Brothers Fund, gave an overview of the fund’s ongoing divestment of its $850 million worth of assets from fossil fuels.
With 75 fund managers in attendance, it was a working conference with action plans developed to put divestment-investment in motion. The content was concentrated on the sectors that have gotten divestment going: colleges, pensions, foundations and family foundations, and faith-based institutions.
Dorsey and Watson went through the process their foundations had undertaken to move into renewables and carbon-neutral companies. Dorsey said that the team effort to accomplish this had really inspired employees in the organization.
“It really has enlivened the foundation,” she said. “It’s one of the most exciting things … at the foundation.”
A week ago, BizWest reported that most of the oil drillers in Northern Colorado were going into debt. Colorado’s biggest driller, Anadarko (based in Texas), is now $15.1 billion in debt.
Campanale returned again to the idea of governance as a way to fund the clean energy transition (an infrastructure cost often pegged at a total of $1 trillion).
“The capital for [the clean energy transition] is closing down and selling off these companies,” Campanale said. “Why don’t we put up our own candidates to run these companies down? Why do we elect these [officers] who just want more and more?”
The divest-invest movement will probably grow as the opportunities become clearer, panelists said. “A lot of the investors who have pulled out of oil and gas have done well,” Dorsey pointed out.
Image credit: Flickr/Kamyar Adl