December 30, 2018

Companies Holding Oil Shale and Tar Sands Reserves Screened Out

For decades, the ELCA has publicly called for God’s people to be aware of the harm done to the earth and to act in ways that better steward our planet’s resources — in its 1993 Caring for Creation social statement, in the 2016 Toward a Responsible Energy Future resolution adopted at the last Churchwide Assembly, and in the Nov. 2017 update to the ELCA’s Environment Social Criteria Investment Screen. This screen now calls for efforts, over time, to remove the largest fossil fuel companies from investment portfolios.

In response, Portico’s board of trustees, last month, approved adding 23 oil and gas companies holding reserves of oil shale and tar sands (3 U.S., 20 non-U.S.) to the list of companies no longer permitted within the ELCA social purpose funds.

Effective Jan. 1, 2019, Portico’s social purpose fund investment managers will exclude stocks and bonds issued by these 23 companies, some easily recognized as large industry players.

“This action is significant,” said Erin Ripperger, Portico’s socially responsible investing and investor advocacy analyst. “Portico will now be excluding from ELCA social purpose funds the companies responsible for about two-thirds of potential CO2 emissions, as reported by the Carbon Underground 200™.” Carbon Underground 200™ identifies the top 100 coal and the top 100 oil and gas publicly-traded reserve holders globally, ranked by the potential carbon emissions content of their reported reserves.

Coal is the most carbon-intensive of all the fossil fuels, and the ELCA’s social criteria screen on the environment encourages culling the worst players as well as working, over time, to exclude the largest fossil fuel companies from ELCA social purpose funds. “Portico answered this call in 2016 by screening out companies with thermal coal reserves,” said Ripperger. “Now, we’re excluding oil and gas companies holding destructive oil shale and tar sands reserves.”

The Problem with Oil Shale and Tar Sands

Oil shale is a form of sedimentary rock that contains kerogen. When heated, kerogen is released as a petroleum-like liquid called shale oil that can be upgraded to synthetic crude oil, a substitute for conventional crude oil. Tar sands are made up of clay, sand, water, and bitumen, a heavy hydrocarbon. Bitumen is used to produce gasoline and other petroleum products.

Mining oil shale and tar sands is worse for climate change than the dirtiest coal. It pollutes air and water, degrades large amounts of land, threatens species habitats, and is energy- and water-intensive. Oil shale production is particularly damaging since it takes an incredible amount of energy to squeeze a barrel of oil out of stone. Producing one barrel of oil shale sends 50% more CO2 into the atmosphere than the amount caused by producing one barrel of crude oil.