Oregon State Treasury Increases Investments in Fossil Fuel Companies

July 25, 2023

Oregon State Treasury (OST) investments in fossil fuels increased by 25% from 2021 to 2022 in the Oregon's Public Employees' Retirement Fund (OPERF) and the Oregon Short Term Fund (OSTF)

These decisions to increase fossil fuel exposure are contrary to the guidance given by Treasury’s own consultants who stated that investing more in fossil fuels increases long term risk and lowers returns.


After multiple public records requests by Divest Oregon, OST now publishes its public equity holdings and private investment funds on its website with values as of June 30 of each year. It publishes the information with a six or seven month lag. The latest data showed that fossil fuel holdings totalled $6.6 billion as of June 30, 2022 versus $5.3 billion for the same period the previous year. 


The public equity investment increase included additional investment in existing holdings and new fossil fuel holdings. The Treasury also committed to make at least a further $2 billion worth of private investments in future years, under contracts that typically last a decade.


Our Methodology 


Divest Oregon is a member of the Climate Safe Pensions Network (CSPN) which has over 20 pension divestment campaigns in the US. Through this network we partner with  STAND.earth & Third Rail Economy to consolidate and analyze OST holdings. 


Each OPERF and OSTF holding is given a fossil fuel grouping by our partners based on its activity. Of the $6.6 billion in fossil fuel holdings as of June 30, 2022, here is a breakdown by those groupings showing an increase in each:


Group 1: Production ($1.1 billion): Oil and gas producers & explorers, and coal companies. Vertically integrated oil/gas companies, meaning companies with oil/gas reserves as well as midstream or refining operations. It was $871 million as of June 30, 2021.


Group 2: Support ($450m): oilfield services/equipment companies, refiners, pipeline and other midstream companies. It was $432 million as of June 30, 2021.


Group 3: Utility ($1.7 billion): fossil fuel power producers, electric and gas utilities. Utilities with an obvious focus on renewable energy production were not flagged. It was $1.37 billion as of June 30, 2021.


Group 4: More Fossil Fuels ($3.3 billion): holdings in companies with obvious fossil fuel interests and actions not fitting easily into groups 1-3. It was $2.56 billion as of June 30, 2021. Holdings in fossil fuel energy private equity funds are assigned here. Diversified companies included on either the CU200 or GCEL lists are also assigned here.


Across all these groups, the investment in NEW fossil holdings from June 30, 2021 to June 30, 2022 totaled $310 million. Examples of these new holdings include: 

  • China Coal & Oil Fields in which OST invested $2.6 million 
  • Qatari energy groups received a $2.5 million investment. 


Increases in fossil fuel holdings went up, not just increases in the share values. Following are three examples of additional acquisitions in fossil fuel company shares:


Chevron CORP

  • 264,204 shares on June 30, 2021 (valued then at $28 million) in OPERF Public Equity
  • 605,422 shares on June 30, 2022 (valued then at $88 million) in OPERF Public Equity
  • There was no stock split.


BHP GROUP LTD

  • 264,929 shares on June 30, 2021  (valued then at  $9.6 million) in OPERF Public Equity
  • 1,298,335 shares on June 30, 2022 (valued then at $37 million) in OPERF Public Equity


CANADIAN NATURAL RESOURCES 

  • 13,600 shares on June 30, 2021 ( valued then at $0.5 million) in OPERF Public Equity
  • 545,158 shares on June 30, 2022 (valued then at $29 million) in OPERF Public Equity


Our information source is the OPERF Public Equity Portfolio Details published on the OST website.


Determining OST’s New Private Investments in Fossil Fuel Funds


For holdings such as public equity and fixed income the Treasury provides each holding name and its market value. For private equity holdings Treasury provides each holding name and its capital commitment, total capital contributed, and “fair value”. It is important to track the amount of commitments OST makes to private equity funds. These commitments represent significant long term obligations that tie up OPERF funds for a decade or more, making it impossible to respond to developments like climate risks and geopolitical shifts. 


One such example of OST’s new investments in fossil fuels include their $250M investment in Advent International GPE X in 2022. Advent has many fossil fuel companies in its portfolio including: 

  • Oceana which is Colombia’s largest crude oil transportation system
  • BOS Solutions: Leading full-service provider of drilling fluid treatment and recovery solutions to oil and gas exploration and production companies 
  • Bill Barrett Corp: a Colorado oil and gas exploration company. 


Divest Oregon reviewed OIC meeting minutes to determine what additional private investment commitments have been made to funds that invest in fossil fuel since June 30, 2022.  From July 2022 through March 2023 OST committed an additional $2 billion to private equity funds that had obvious investments in fossil fuels.  The figure is likely much higher, but the secret nature of private equity funds makes it impossible to gather all the facts. 


Four of the funds that enjoyed commitments by OST (Blackstone Energy Partners, Encap Flatrock Midstream, Global Infrastructure Partners, and NGP Natural Resources) are featured in the Private Equity Stakeholder Project’s (PESP) Private Equity Dirty Dozen report, which profiles some of the most destructive fossil fuel investments of the world’s top private equity firms. Divest Oregon has repeatedly pointed out the numerous problems with private equity, and published the report Oregon Treasury’s Private Investment Transparency Problem to provide more details to the public, especially PERS members. The secret nature of private equity poses a significant problem when assessing OST’s fossil fuel exposure because we are blocked from knowing the details of what each private equity fund invests in. Our analysis  provides us with a representation of the private equity funds with known and significant fossil fuel exposure, but we know it is not all inclusive.  There is more, and  OST continues to invest significant PERS funds in fossil fuels. 


Divest Oregon will continue its campaign to hold OST accountable for its risky fossil fuel investing and demand that decarbonization strategies be implemented  immediately.

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