Dan Steingart

Originally from May 1, 2020, edited Dec 23, 2020; Aug 25, 2025

On Fossil Divestment

What follows is a lightly edited message to a thread on the nature of divestment. It reflects my feelings on the subject as of Dec 23, 2020, and it has just been edited to remove the thoughts and names of people whose right to privacy I wish to respect. I reserve the right to completely disagree with what I wrote in the future if I experience further enlightenment.

I work with oil companies even though I have dedicated my work to a post-oil economy

A bit of background. I have worked on batteries as a replacement/alternative for fossil fuels for two decades and am working feverishly to displace hydrocarbons. I have also been funded and have learned much from oil/gas/energy companies (BP, XoM, and to a lesser extent Shell). I have never done a lick of combustion research. I have been funded to do battery work, which is now being commercialized and helping increase the number of EVs on the road and GWh on the grid. 95% of the students who have graduated from my lab are working on displacing hydrocarbons by making better technologies for the applications they serve.

My, perhaps pollyanna-ish, view is that these companies will shift to the more profitable long-term approach by clearly demonstrating the future is better without fossil fuels.

My certainly cynical view is that once a company pulls the IPO trigger, all modern corporations behave similarly because of the inherent rules of corporate engagement:

So in my work, I try to bring both views to bear and create technologies better than fossil fuels that would incentivize “oil” companies to become “energy” companies in more than name only.

Oil/Gas Companies Are Not Analogous to Tobacco Companies or Racist Regimes

These companies we are considering for divestment have not been good stewards of the world’s resources.

They have clearly denied their actions, which were harmful in the past and in the present. They currently have overrepresented interests in policy and government, which is wrong and not encouraged. I want them to behave differently going forward, and I wish they had acted differently in the past.

However, these companies have successfully developed efficient pathways for moving TWh around the globe. The practice of chemical engineering grew primarily from lessons learned in oil refinement, and these methodologies and techniques have been crucial for improvements in pharmaceutical engineering and biomedical sciences.  All oil majors had significant roles in the development of photovoltaic technologies, and the work recognized for the Nobel prize in batteries came in significant part from XoM.

So oil/gas majors are misbehaving and have misbehaved. Still, their existence has also provided funding and resources for technologies that are now crucial for the displacement/replacement of fossil fuels. Unlike the tobacco and diamond trade, there is some benefit despite the massive consequences of harm. As a more succinct colleague put it: the optimum interaction with Poison and Racism is zero, but with energy majors is not zero. As others put it, we would extend our hands in their ideal interaction, but not our dollars.

I am of the school of thought that the era of fossil fuel increased both world HDI and food production, and these companies, per the reasons I outlined above, helped invent the technologies that will eventually displace their current production. But they have not shifted to these new products nearly fast enough.

I appreciate the arguments that “how can we look our students in the face if we don’t do this,” but I think we owe it to our students not to take a symbolic stance but a careful one that balances our goals and ambitions with a more complex criticism, and appreciation, of what the oil era has brought us.

I teach a class on energy resources. I spend the first weeks motivating why we live in a petroleum world, and the remainder of the semester explaining how to move beyond hydrocarbons technologically.

Divestment Should Have a Clear Outcome In Mind; Clean Hands Alone Are Problematic

I do not care to speak to the strength or weakness of an endowment here; if the company/individual is morally/ethically bereft to the extent we do not want to interact with them, we should not interact with them in any way. The Epstein scandal comes to mind here. We have a range of valid opinions on this in the room, and this is a complicated question that deserves vigorous debate.

In many ways, if divestment were a real stick and not a symbolic one, it would be better to wield because (way oversimplifying) South Africa was an external force that brought significant consequences upon an actor. I worry divestment, in the case of oil/gas, invokes the problem of clean hands. It’s a symbol without power, and in doing so, we too easily overlook the positive contributions of the oil/gas sector and our own contributions to the problem, and we lose a significant lever.

We should divest if we create change, not just signal that we are good people. Our research and actions clearly indicated that we are working to make the world a sustainable, CO2 < 400 PPM place. I understand that active investments in hydrocarbon extraction are at odds with this. Still, I would argue that correctly applied hydrocarbons today will result in the obviation of hydrocarbons soon.

Game Theory Is Hard

I do what I do because I enjoy decoupling complex but deterministic relationships. The outcome of divestment is anything but deterministic. Some believe that this industry is net negative enough to merit complete disengagement. I understand this and get it.

My take on this is to be honest and do the energy/mass balance and ask:

“How much CxHy do we need today to ensure the most expedient, mutually profitable long-term pathway to a hydrocarbon-free or minimal future, and what will this cost?” 

If we cannot agree on a path, the only path is divestment. But if we can agree, collaboration seems to be the best path.