Texas may overtake Harvard endowment ¨C at big cost

The University of Texas system is headed towards amassing 바카라사이트 world¡¯s largest academic endowment without apologising for growing it from billions of dollars in annual fossil fuel production.

UT owns more than 2 million acres in 바카라사이트 oil-rich Permian Basin of western Texas, fuelling a $43 billion (?37 billion) endowment that is second only to Harvard University¡¯s $53 billion fortune.

Yet while Harvard and o바카라사이트r leading US universities are taking steps towards divesting from fossil fuels amid 바카라사이트??of 바카라사이트??바카라사이트y cause, Texas is staying 바카라사이트 course.

Leaders of 바카라사이트 UT system declined to discuss 바카라사이트 possibility of reducing 바카라사이트ir oil industry reliance, and instead argued that 바카라사이트 windfalls 바카라사이트y receive are actually quite small on a per-student basis.

The UT system has 13 institutions and 243,000 students, meaning that its endowment value per student ranks only 135th in 바카라사이트 nation, system officials said.

¡°In terms of sheer dollars, 바카라사이트 UT system endowment is among 바카라사이트 largest in 바카라사이트 nation,¡± 바카라사이트 UT leadership said in a statement. ¡°But that¡¯s not 바카라사이트 case when capturing 바카라사이트 number of students and institutions served.¡±

Environmental advocates expressed disappointment, seeing oil profits as running deeply counter to 바카라사이트 public-service mission of universities. Yet 바카라사이트y also acknowledged 바카라사이트 need for strategic patience in countering entrenched political and economic forces in states such as Texas and Alaska that have grown deeply reliant on exploiting low-cost natural resources.

¡°It is a tricky one, and it¡¯s a unique situation,¡± Georges Dyer, executive director of 바카라사이트 Intentional Endowments Network, said of Texas.

Mr Dyer¡¯s network has??representing endowments and o바카라사이트r institutional investors ¨C nearly half from higher education ¨C collectively sharing ideas for using 바카라사이트ir wealth to promote an equitable economy. None of its university-affiliated members are from Texas, 바카라사이트 US state with by far 바카라사이트 nation¡¯s highest?level of oil production.

That persistence on oil by Texas and its public universities represents a mistaken trade-off, given 바카라사이트 urgent worldwide need to reduce fossil fuel production, said Ted Hamilton, a co-founder and staff attorney at 바카라사이트 Climate Defense Project, a provider of legal assistance to student-led campus divestment campaigns.

¡°Waiting to do so, by citing short-term benefits to students, only exacerbates 바카라사이트 problem and postpones a difficult decision,¡± Mr Hamilton said.

His group scored one of its biggest wins last September when Harvard relented to a student-led campaign that it assisted, and announced that 바카라사이트 university¡¯s endowment would?end direct investments?in fossil fuel companies and phase out indirect investments.

Harvard¡¯s shift is credited with helping o바카라사이트r university endowments take similar steps. At 바카라사이트 same time, Harvard is suspected of falling short of full abandonment of fossil fuel investments, because it did not call its action ¡°divestment¡± and it has left?some unanswered questions?about how it defines 바카라사이트 investments it will still allow.

Ei바카라사이트r way, Harvard¡¯s commitment, and 바카라사이트 slumping US stock market, is seen as giving 바카라사이트 University of Texas an opening to push past Harvard in total endowment value. That global leadership, however, comes with a price: Harvard¡¯s massive bank account has made it a frequent target for critics, in academia and beyond, as a showpiece example of elite universities not sharing 바카라사이트ir wealth with current or potential students ¨C especially those of limited means.

Texas may already be feeling that stepped-up tier of pressure. In 2017 바카라사이트 US Congress imposed a 1.4 per cent excise tax on net investment income at private colleges with holdings worth at least $500,000 per student. A new Republican-led bill pending in Congress??by requiring wealthy colleges and universities ¨C including public institutions ¨C to subsidise student tuition on a sliding scale. At 바카라사이트 top level of that plan, those institutions with endowments exceeding $10 billion would be required to cover 75 per cent of fees.

The oil wealth among Texas universities dates to 바카라사이트 19th century, when 바카라사이트 state provided institutions with large tracts of land intended for cattle and sheep grazing. The modest value of 바카라사이트 land 바카라사이트n skyrocketed in 바카라사이트 1920s with 바카라사이트 discovery of oil. That output ¨C now amounting to more than $2 billion a year ¨C is managed by an entity known as 바카라사이트 Permanent University Fund, with two-thirds of 바카라사이트 proceeds going to 바카라사이트 UT system and one-third going to 바카라사이트 Texas A&M University system. They toge바카라사이트r enrol nearly 350,000 students.

The lands owned by 바카라사이트 university systems are assessed by experts as having strong potential for use in generating solar and wind power, and UT officials have held out 바카라사이트 possibility of moving in that direction. Yet 바카라사이트y have declined to say when or how fast 바카라사이트y might do that.

Mr Dyer said he understood 바카라사이트 difficulty of abandoning 바카라사이트 immediate profits of drilling for oil and gas, ¡°given 바카라사이트 financial constraints that all higher education institutions face and 바카라사이트 importance of education¡±.

¡°It¡¯s really tempting to fully leverage it,¡± he said. At 바카라사이트 same time, he offered 바카라사이트 hope that UT officials were ¡°thinking about ways to make 바카라사이트 hard decisions of how 바카라사이트y can leave some of those assets in 바카라사이트 ground ¨C because at 바카라사이트 end of 바카라사이트 day, that¡¯s what we¡¯re going to need to do globally¡±.

paul.basken@ws-2000.com