PD Editorial: Leave CalPERS out of Dakota Access pipeline battle
California lawmakers have begun submitting legislation for next year's session, and Assemblyman Ash Kalra has an early entrant for a legislative raspberry award. The San Jose Democrat has submitted Assembly Bill 20, which would require the state's two public employee pension funds to sell off holdings in companies that are constructing or funding the controversial Dakota Access pipeline.
CalPERS has enough challenges of its own without becoming entangled in this dispute.
That's not to say the protest is without merit. The pipeline, as designed, would carry Bakken crude oil from North Dakota to Illinois, where it would link up with existing pipelines. Originally, it was supposed to pass close to Bismarck, the state capital, but concerns that a spill could ruin the city's drinking water led to rerouting the project close to the Standing Rock Sioux reservation.
The rerouting has set off months of protests that have drawn national attention. Those living on these tribal lands and their many supporters have a right to be concerned. If the risk of a spill was too great for Bismarck, surely the same can be said of its current placement immediately upstream from the Standing Rock Sioux Nation. Environmentalists have joined the chorus of protesters pointing out that existing mines, oil wells and gas fields in the United States contain a combined 86 billion tons of carbon emissions - enough to unilaterally raise the Earth's temperature another 0.4 degrees or so. America needs projects to lessen the nation's dependence on fossil fuel, not increase it.
Thankfully, the U.S. Army Corps of Engineers has denied a necessary easement, so the project is on hold for now.
However, calls for divestment as a tool to pressure oil companies to back down are continuing. AB 20 is an example.
But this would run the risk of making one problem worse in hopes of stopping another. The funding problems with California Public Employees' Retirement System and State Teachers' Retirement System are well documented. Robust pension benefit increases of more than 10 years ago combined with steep investment losses in 2008 have combined to leave cities and counties having to pony up significantly more taxpayer dollars to ensure retirement funds meet their financial obligations. Every dollar these funds consume is now one less dollar available for the public services that taxpayers think they are funding.
To meet their financial objectives, these retirement funds are expected to grow at an average of 7.5 a year for 20 years. Whenever they fall short of that, which has been the case in recent years, taxpayers, once again, have to make up the difference.
In some cases, we might support using public employee funds to engage in socially conscious investing if it can be done while still achieving financial objectives. But the taxpayers haven't seen investment goals being met even without these investment limitations, and they shouldn't be left holding the bag - yet again.
If Kalra wants to join protesters marching outside a bank or oil company headquarters, they should do so. What he and other supporters of divestment shouldn't do is put the state retirement funds at further risk by using it as a protest tool.
State legislators should reject AB 20, and any other attempt at using the state's retirement funds in this way. There are better ways to oppose this pipeline. People in North Dakota are showing it.