By: Mark Glennon*
The timing on Wednesday was impeccable. I was looking at the price of oil, which was up four percent that day and about to pass $100/barrel. Energy stocks were up over one percent despite a horrible day for the rest of the market.
That’s when an email popped up with a story in Crain’s headlined “Chicago moving to divest from fossil fuels.”
And later that evening came news of Russia’s invasion of Ukraine. Russia is able to fund that effort thanks to its only real industry, oil and gas production, revenue from which has been driven up by the West’s suppression of production and America’s abandonment of energy independence, which it had just 18 months ago. Now, America has been importing roughly 20 million barrels of oils per month from Russia, which means we’ve been sending Russia about $2 billion per month.
So, with inflation raging, gasoline moving towards $4.00/gallon and Russia murdering Ukrainians with the help of American oil purchases, Chicagoans can take comfort knowing that the city will refuse to invest in oil and other fossil fuel production and thereby “will be sending a message that Chicago is permanently leaving dirty energy in the past and welcoming a clean energy future for generations to come.”
That’s from Chicago Treasurer Melissa Conyears-Ervin. She and members of the City Council, with Mayor Lori Lightfoot’s support, are pushing for an ordinance to mandate that the city divest its funds from fossil fuel companies, as Crain’s reported.
In fact Conyears-Ervin had already made oil and gas divestment office policy. The new ordinance would make the change permanent going forward. Her office has already removed $70 million in fossil fuel-associated bonds from the city’s portfolio, she says.
How wise has it been lately to be shunning fossil fuel investments? Here’s a chart comparing performance year-to-date of the S&P 500 to XLE, an ETF basket of mostly oil and gas companies. While the market in general is down some 10% the oil and gas stocks are up over 21%.
The Chicago Treasurer’s office actually invests mostly in bonds, not stocks, but you get the point: This is not a good time to be turning your nose up at fossil fuel investments.
It’s just another chapter in “ESG” investing – environmental, social and governance – which we have criticized often. It prioritizes the social justice goals du jour over rate of return, and fossil fuel producers are the primary villans in the ESG world. Whatever the social justice warriors don’t like gets dumped. When Trump was president, some Illinois lawmakers even tried to get the state to divest any company supplying materials for a wall on the Mexican border.
The State of Illinois under Treasurer Michael Frerichs is also heavily focused on ESG investing, disfavoring oil stocks, which we have covered earlier.
What investments does Conyears-Evans like and how have they been doing? Good luck finding that. Her office is the least transparent office we have encountered. We described our frustration in a 2020 column.
There is serious money at issue. Chicago has $8.4 billion in total assets and $646 million in cash as of Dec. 31, 2021, as Crain’s reported, and managing that money is supposed to be the treasurer’s primary role. But if you look for where it’s invested on the treasurer’s website you will find there’s nothing there, not even current totals or a cash balance. We have reached out to her office with questions in the past but never gotten a response.
What you will find on her website and Facebook page is endless messaging on social justice issues — equity, Women’s History Month, systemic racism, etc.
Returns on taxpayers’ money be damned. Inflation be damned. Energy independence be damned. Enrichment of Russia be damned. Only environmental social justice counts.
*Mark Glennon is founder of Wirepoints.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
Governor Pritzker will do whatever President Biden tells him to do. This is what President Biden told him to do. In return the state will get a pot of money as per usual. We are a Blue State. We are a failing, run down, do what you’re
told, quid pro quo Blue State. That won’t change as long as the federal government gives the Illinois government the money it needs to give to people who have figured this system out. Those people will continue to vote for Illinois government officials dolling out the cash. Why not? What a sweet deal.
The Ruling Class is a threat and we see it keenly in Illinois. This article is applied to America, but checks the boxes of a variety of great articles on Wirepoints raising the same issues and concerns. I wonder if it resonates and reflects Illinoisans? Or just Wirepoint readers? With conservative common sense residents discouraged and moving out of Illinois, it’s sad to see the damage done by the Ruling Class.
https://thefederalist.com/2022/02/25/the-ruling-class-is-a-far-greater-threat-to-americans-than-russia-is/
Thank you, and agreed. We are being destroyed by our own government. It’s truly hard to think of how they could be destroying the country faster than they are, within the bounds of what they could reasonably hope to get away with.
What can we do? Pay cash for healthcare. Find direct-pay providers and use them. Legally Stop/limit all activity that ‘feeds the beast’. (Minimize personal taxes to the State). If you have a business, move it away. If you are a consumer, cut back all purchasing which (through taxation) fortifies the corrosive corrupt incestuous political class. This includes cell phones and electricity and all purchases, especially vehicles. ILLINOIS Farmland is at the point that the percentage of gross revenues needed for taxes exceeds that of commercial rental property. (this depends on local property tax rates. At 3.6% in McHenry County, farmland… Read more »
From idiotic public officials, deliver us, O Lord.
Maybe God has already answered your prayer by creating Tennessee and a few other conservative states.
As Forest Gump always said . I thought , silly me , that we would’ve seen a little smarter governance from a new and “smarter group”. Unfortunately we have activists not managers. These folks work on emotions like all dutiful democrats. They’ll dig a deeper hole for pension funds and add their friends to this walk away and stick it to the taxpayers. Aren’t these “folks” our employees? With a corrupt media who will never ask a question we see first hand the consequences of an election. I’m happy I already left.
With Ukraine war & skyrocketing inflation all that clean energy/ pc crap is a politics disaster for dems nationally. Now Europeans and US are so dependent on Russian oil & gas they’re going to let Putin slide and NOT impose sanctions on his oil & gas. The Saudis are refusing to pump more oil. Bidden canceling Keystone is going to haunt him big time going into Nov…But not in Illinois because we have no choice other than to be shoe-shiners for the machine and somehow be thankful to masta jb for our little few $cents a gallon tax break which… Read more »
I believe IL just passed a green energy boondoogle bill last year.
https://www.msn.com/en-us/money/markets/illinois-new-green-energy-law-will-increase-your-utility-bill-but-how-much-and-why/ar-AAQ6ogT
With crap like this, Democrats are worried more about ideology than reality. And it ALWAYS Blows up in their face … and they will suffer serious consequences.
And anyone who voted for this crap is not to be taken seriously. I don’t want to hear from any one who believes its a good idea.
Even Venezuela massively in debt/bankrupt oil industry is supposedly pumping up production (sure 1%er sharkey & gates @ ctu will be happy). So, all the oil dictatorship (Russia, Saudi-Arabia, Iran) weather they’re pumping more or not are cleaning up over Illinois pols fake eco-warrier/ virtue signalling on taxpayers dime. also, don’t forget Illinois is still a major exporter of coal to china with skyrocketing oil prices has only made exported coal to china even more in demand
“With crap like this, Democrats are worried more about ideology than reality.”
You just figured that out?
Chicago’s treasurer was chosen for her “diversity”, not for her financial acumen. Tally all of the diverse who, for their own benefit, are guiding Chicago into the ditch. The mayor, the state’s attorney, the county board president, the chief Cook County judge, etc. All selected for their “diversity”, not a single one for their competency. When that’s the criterion for selection, don’t expect anything good. Don’t be surprised when the joint collapses. Be pleasantly surprised when one of these “diverse” types is competent. A rare twofer for sure.
This is what happens when you give important jobs to low information clowns
See also Chicago Police Department.
No this is what happens when union jobs go to your brother your sister your uncle your father your friend whoever is not qualified to do the job but knows im someone who knows someone. That is exactly what is ruining the state of Illinois. Get a clue.
City Council Is Mishandling Taxpayer Money — Making Investment Choices Based On Goofy Green Grifters’ War On Oil Agenda — Instead Of Actual Investment Advice — REALITY CHECK: Both Failed President Biden, And The European NATO Nations — Are Now Learning A Hard Lesson — That They Can’t Power Their Economies With Windmills And Unicorn Farts — And That Failure To Have Oil Security Is An Economic Death Sentence