State invests pension fund dollars in oil and gas companies

Albany, NY – New York State's pension fund is made up of diversified investments, some of which are in energy companies. As WAMC's Hudson Valley Bureau Chief Greg Fry reports, the investments are in companies that are growing due in part to gas drilling operations, which some are trying to stop from being established in New York...

There are questions about New York's more than one billion dollar investment in oil and gas companies, some of which are waiting to see if New York state will allow drilling for natural gas, and more specifically, the process of hydraulic fracturing, in the future.

State Comptroller Thomas DiNapoli is the manager of the more than 140 billion dollar fund. According to the latest filings from his office, over 71 and a half million dollars is invested in shares of Chesapeake Energy Corporation, nearly 26 million in shares of Cabot Oil and Gas, and over 145 million dollars in Schlumberger Limited.

Russ Haven is Legislative Counsel with the New York Public Interest Research Group. He says the ultimate goal of the state's investments is to make money for the fund, so that retirees can receive their pensions. He says NYPIRG and other groups have often called for the state to use the pension fund to change marketplace conduct, and to improve the standards of corporate behavior.

Haven says nuclear energy and hydrofracking are potentially dangerous ways to generate energy, and says the state should focus its energy future elsewhere.

Haven says there are potential problem to investing in these companies, adding that it could potentially create a conflict of interest, as the legislature and Governor look for ways to address hydraulic fracturing, as they are invested in companies.

Dennis Tompkins is a spokesman for the New York State Comptroller's Office. He says energy companies are typically a very good investment for the fund. Tompkins says a lot of the funds are part of an indexed portfolio that is driven by the market, and not by individual decisions on investments.

Tompkins says the Comptroller has urged natural gas companies that the state has invested in to examine the risks of drilling in New York. He says the belief is that environmental safety and economic viability go hand-in-hand. Tompkins says if there is some sort of disaster surrounding fracking, it has an effect on the environment and the economy. Those are the concerns, he says, that the Comptroller is considering.

Wes Gillingham is with Catskill Mountainkeeper, a vocal opponent of the practice of hydraulic fracturing in New York. He raises questions over the investment in Cabot, which has been at the center of the controversy surrounding contaminated water in Dimock, Pennsylvania, brought on by drilling. Gillingham states if he were somebody investing in a corporation, that would not be a corporation he would invest in.

Gillingham says this is part of a larger conversation about drilling in New York, and where money is being spent. He says a closer look at all of the money flow is important.

Tompkins says the one thing to avoid is repetition of what happened with the BP oil spill in the Gulf of Mexico, and having to take similar action to recoup money which was lost as part of that investment.