Stanford University is a national leader in a whole variety of categories that place it among the highest-rated universities anywhere in the world.
But the Palo Alto-based college recently drew attention for a topic that has nothing to do with academic achievement, top-notch research or a robust endowment.
Stanford’s Board of Trustees, under pressure from a student group called ‘Fossil Free Stanford’, voted earlier this month to divest the school’s investments in coal companies.
Here’s the press release issued by Stanford, which contains a pledge that the university “will not make direct investments in coal mining companies,” and more to the point, “100 publicly traded companies for which coal extraction is the primary business.”
So Stanford is now coal clean?
According to the director of Stanford’s Program on Energy and Sustainable Development, Frank Wolak, that is just not true.
“I think [the divestment] is purely a symbolic gesture,” Wolak said recently in an interview with NBC Bay Area News. “You can classify this as sort of a kind of boycott, and boycotts are kind of notoriously unsuccessful.”
Why does he categorize the divestment as symbolic?
Well, for a number of reasons. For one, Wolak says Stanford still benefits from coal and its byproducts for projects all over campus.
“We use many products that are derived from coal: Steel that goes into the buildings is produced with metallurgical coal, cement which goes into the concrete in our buildings is primarily produced from low-cost electricity, which is very likely to have been produced from coal,” Wolak said.
There’s also the matter of coal-produced electricity flowing into Stanford’s facilities and classrooms.
Wolak estimates that about 20 to 30 percent of California’s electricity comes from out of state, where there is a mix of sources, including coal.
“The laws of physics make it very difficult for you to figure out where your electrons are coming from,” Wolak said, “so we certainly aren’t clean in that respect.”
Stanford Spokesperson Brad Hayward says the university has been completely up-front about the scope of its divestment.
“The divestment focuses specifically on coal mining for energy generation -- not coal mining for steel production or other purposes,” he said.
Fossil Free Stanford actually demanded the school freeze its investments in fossil fuels of all stripes, not just coal, because “it is unconscionable to pay for our education with investments that will condemn the planet to climate disaster,” according to the group’s website.
Hayward told NBC Bay Area News that the school’s board of trustees chose to divest from coal, and not from other fossil fuels, for very specific reasons.
“Coal is among the most carbon-intensive energy sources,” he noted, “and alternatives to it are available.”
He then added, “The advisory committee that made the recommendation to the trustees on this issue concluded that fewer alternatives are currently available for other fossil-fuel energy sources on the massive scale that will be required to replace them broadly in the economy. As a result, they were not included in the resolution.”
It may be relevant to note that data shows coal as an investment has taken a bit of a tumble.
The Dow Jones U.S. Coal Index currently sits around 145, or roughly 70 percent lower than the index’s peak of almost 500 in April of 2011.
The largest coal producers, like Peabody Energy, were down massively in 2013. Peabody’s stock lost 28 percent for the year.
Shale oil and natural gas companies, conversely, are exploding as the industry continues to produce big gains.
So is Stanford pushing forward an eco-conscious investment platform or making sure not to shoot itself in the foot, financially? It appears a little bit of both.
“A number of university endowments have been heavily invested in things like the shale gas boom, the revolution in shale oil as well, and that’s been extremely lucrative,” Wolak said. “Sitting on the sidelines and not taking part in the largess that is the shale gas boom in the United States could be very costly to your endowment.”
Wolak says the best option for Stanford may be to implement a carbon pricing program, whereby the university could charge students and faculty more for using resources or engaging in activities that have a higher carbon footprint, with the money raised ultimately given back to the community.
Students we spoke with this week seemed receptive to the idea, although they wanted more details.