WASHINGTON, June 7 (UPI) -- A growing move in the United States to divest from oil and gas investments is a knee-jerk reaction that could jeopardize long-term values, an energy group said.
The American Petroleum Institute, which represents the interests of the U.S. oil and natural gas sector, responded to word that the District of Columbia Retirement Board opted to divest from the industry.
Even though a lower price for crude oil has cut into the budgets of U.S. energy producers, the API said the country is still a world leader in oil and gas production and moving funds out of the industry may be short-sighted.
"Divestment from energy stocks is likely to reduce investment returns and is therefore not in agreement with their fiduciary responsibility," Kyle Isakower, the API's vice president for economic policy, said in a statement.
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New York City is leading a national trend in divestments from coal, with pension fund managers called on to move away from the resource. Earlier this year, the Rockefeller family, which made its fortune on oil, said fossil fuels should stay in the ground for the sake of the environment. Singling out Exxon Mobil, fund managers said they were frustrated with allegations the company worked to mislead the public about the impact fossil fuels had on the global climate.
The New York Attorney General's office issued a subpoena to Exxon last year following a series of reports claiming the company was misleading investors decades ago about the potential impact its sector had on the environment.
Isakower countered that gains in U.S. oil and gas production coincide with efforts to cut climate emissions. Despite some reservations from the industry itself, the U.S. government earlier this year enacted new rules aimed at cutting emissions of methane, a potent greenhouse gas, from new or modified oil and gas wells.
In April, the board of trustees at Stanford University opted to remain invested in fossil fuels. The board said the university was "deeply engaged" in developing alternative solutions, but oil and gas will remain key components of the global economy for the foreseeable future. The industry, meanwhile, is taking its own strides to reduce its environmental footprint, it said.
