Yale has recently held a direct stake of about $122 million in an American-based fracking services company, documents filed with the Securities and Exchange Commission last month show.
The filings indicate that, as of July 1, Yale held more than 5.5 million shares in Antero Midstream General Partners, or AMGP. AMGP owns some of the cash distribution rights from Antero Midstream, a separate public corporation that provides production support for partner company and natural gas producer Antero Resources. The University has previously held upwards of $200 million worth of shares in Antero Resources directly and, as of July 1, owned shares worth about $85 million in the company. The news was condemned by student activists who have pushed the University to divest from fossil fuels.
“It is obviously a setback for the divestment movement,” said School of Public Health Professor of Epidemiology and fossil fuel divestment advocate Robert Dubrow. “Given Yale’s global prominence, Yale divestment would have tremendous impact in spurring other universities to do the same.”
Yale’s stake was revealed in an SEC Form 13F, a document that investment managers with more than $100 million in invested assets are required to disclose investments made in the public stock market.
The investment’s appearance on the most recent filing does not necessarily indicate that the stake is a result of new investment activity. While it is possible that the University directly purchased shares of AMGP following its initial public offering on the stock market in May, Yale could also have invested in AMGP when the company was privately held. In the latter case, it is standard practice in the financial services industry for there to be lock-up provisions that prevent private investors from selling shares for a designated number of days.
Yale spokesperson Thomas Conroy did not elaborate on any aspect of the investment and told the News that the University does not comment on its investments.
According to an investment prospectus filed with the SEC, Antero Midstream is a company formed by Antero Resources to provide various services to its parent company and facilitate the movement of natural gas from production sites to end users. Antero Resources sources oil and natural gas from the Marcellus Shale in Northwest West Virginia and the Utica Shale in Southern Ohio and is among the largest fuel producers in both regions.
In the prospectus, the company claims that the shales in Ohio and Appalachia are “unconventional sources” for fuel that require hydraulic fracturing — commonly known as fracking — to release liquids and natural gas from previously impenetrable rock. The process requires large volumes of water and chemical additives to be pumped at high pressure to crack open rock and has garnered significant controversy, as environmental activists blame the fuel extraction process for hastening greenhouse gas emission rates and contaminating drinking water supplies with cancer-causing chemicals.
“This company exemplifies environmental recklessness and corporate greed,” said Fossil Free Yale member Tristan Glowa ’18, noting Antero Resources’ involvement in environmental accidents including oil spills and well explosions. “Yale has enabled their behavior.”
According to Yale history professor and fossil fuel divestment advocate Glenda Gilmore, while the University’s investment in fracking and its cleanup may seem “ethically dubious at the best of times,” the recent disclosure of the University’s investment is particularly alarming due to the current fires in the Western states and floods in Houston.
Gilmore also noted that the investment potentially aligns some of Yale’s financial interests with the Trump administration’s policy preferences.
“Antero’s expansion in West Virginia indicates that the company is betting on reduced environmental regulation under the current administration,” Gilmore said. “By investing in Antero, I wonder if Yale is too.”
Since the Yale Corporation voted against divesting the University’s assets from fossil fuel companies in August 2014 due to the complexity of identifying the companies responsible for the socially injurious impacts of climate change, the investments office has taken steps to account for the impact of its investment decisions on climate change.
Building on a history of contributing to the University’s sustainability efforts — the office has invested in wind power projects since at least 2007 — Chief Investment Officer David Swensen wrote a letter to the endowment’s external managers in 2014 that asked them consider their investment decisions’ effects on climate change.
In an April 2016 statement to the campus community, Swensen wrote that the letter is now shared with all new external partners. In a New York Times interview covering the announcement, Swensen said that a board-approved investment in an energy company had fallen through because of their dismissal of climate change concerns.
“When we sat down with the company and brought up these issues, they denied it was a problem,” Swensen told the Times. “So we did not go forward with the investment.”
Swensen’s statement also announced the sale of about $10 million worth of investments from three publicly traded fossil fuel producers.
Dismissing the $10 million divestment as a “successful PR move,” Fossil Free Yale member Rachel Calnek-Sugin ’19 noted that the University’s indication that it would be taking climate change into account in its investments decisions coincided not only with faculty-produced research showing the health risks of natural gas extraction and fracking but also with the disclosure of its investments in companies like Antero.
“There are two Yales: One is a research institution; the other is a corporate endowment,” Calnek-Sugin said in an emailed statement. “Yale is a leader in the way that universities invest. It needs to move its money if it wants to lead in the right direction.”
As Yale invests a substantial majority of its $25 billion endowment through external investment managers, only the small fraction of investments made in publicly traded entities is disclosed on the form. With a cumulative value of slightly less than $400 million, the assets disclosed in the latest 13F filing represent less than 2 percent of Yale’s total investments. However, since Yale keeps with the norms of most large institutional investors in refusing to disclose current investments made through external investment partners, the filing provides the most up-to-date insight into the activities of the University’s investments office.
Since July 3 — the first Monday after the reporting period for the filing— Antero Midstream Partners’ stock price has fallen from $33.73 to $31.23.
Ishaan Srivastava | firstname.lastname@example.org
Correction, September 13: An earlier version of this article incorrectly stated that Yale held more than 5.5 million shares in Antero Midstream (AM) as of July 1. In fact, Yale held more than 5.5 million shares in Antero Midstream General Partners (AMGP), which owns a portion of the cash distribution rights from AM.