TIME russia

Total Oil Company CEO Dies in Moscow Plane Crash

Christophe de Margerie, CEO of the French oil and gas company Total SA, speaks during an interview with Reuters in Paris
Christophe de Margerie, CEO of the French oil and gas company Total SA, speaks during an interview with Reuters in Paris on July 7, 2014 Benoit Tessier—Reuters

Christophe de Margerie was headed for France in his Dassault Falcon 50 business jet when it collided with a snow-removal machine during takeoff

(MOSCOW) — The CEO of French oil giant Total SA was killed when his corporate jet collided with a snow removal machine Monday night at Moscow’s Vnukovo Airport, the company said.

Total “confirms with deep regret and sadness” that Chairman and CEO Christophe de Margerie died in a private plane crash at the Moscow airport, the company said in a press release dated Tuesday and posted on its website.

Airport officials told Russia’s Tass news agency that the collision occurred at 11:57 p.m. Monday, killing de Margerie and three crew members, all of them French citizens.

“The thoughts of the management and employees of the Group go out to Christophe de Margerie’s wife, children and loved ones as well as to the families of the three other victims,” the company news release said.

A representative of the transport investigative department told Tass that the French-made Dassault Falcon 50 business jet, headed for France, collided with the snow removal machine during takeoff. Airport officials said the driver of the snow removal machine was not hurt.

Visibility at the time of the crash was 350 meters (1,150 feet), airport officials told Tass.

De Margerie, 63, known as “Mr. Moustache” for his bushy facial hair, rose through the ranks at Total to become CEO in 2007, and added the post of chairman in 2010.

De Margerie joined Total after graduating from the Ecole Superieure de Commerce in 1974, according to the company’s website. He served in several positions in the Finance Department and Exploration & Production division before becoming president of Total Middle East in 1995. He became a member ofTotal’s policy-making Executive Committee in 1999.

Paris-based Total is the fifth-largest publicly-traded integrated international oil and gas company in the world, with exploration and production operations in more than 50 countries, according to a profile on thecompany’s website.

TIME energy

Low Oil Prices Raise the Risk of Recession in Russia

Russia oil
Russia will look to tap Arctic resources of oil and gas Photo by Dmitry Korotayev/Kommersant Photo via Getty Images

Oil prices dipped to around $92 per barrel in early October

This post originally appeared on OilPrice.com.

Falling oil prices are inflicting deeper economic pain on Russia’s economy, which is already reeling from EU and U.S. sanctions.

Russia is currently considering its budget for 2015-2017, and based on the numbers, the Kremlin is planning for leaner times. With oil revenue accounting for around half of the country’s budget, any dip in prices has a ripple effect.

And in recent years, Russia’s economy has become more dependent on oil to meet its budget commitments. Excluding oil revenue, Russia has run a budget deficit that hit 10.3 percent in 2013, the highest level in three years.

In other words, the government needs oil revenues to plug budget holes, and that need is growing.

Related: Will Ukraine Commit Economic Suicide?

Russia occupies a strong economic position when oil prices are high, but for every $1 decline in the price per barrel of oil, Russia loses $2.1 billion in revenue on an annualized basis. Slumping oil prices in recent months could see revenues to the state decline by $30 to $40 billion.

The Russian economy may only expand 0.4 percent this year, and just 1 percent in 2015. But even that meager growth rate is not a certainty. Russia is increasingly facing the possibility of recession, according to a Bloomberg survey of economists.

Oil prices dipped to around $92 per barrel in early October. While that won’t plunge Russia into an immediate economic crisis, the government needs oil prices to stay around $105 in order to balance the budget. Thus, if oil prices don’t rebound soon, problems will only grow worse for the Kremlin.

The upcoming budget plans for the possibility of persistent inflation, a weakening ruble, and the potential need for the state to dip into cash reserves in order to finance its budget. What is worse, even this negative outlook is based on highly optimistic assumptions – it assumes oil prices of around $100 per barrel.

“It is quite optimistic given where oil prices are at now and given how much the Russian budget depends on oil revenues,” Liza Ermolenko, an analyst at Capital Economics, told The Moscow Times. “For the next year, it’s more likely that the oil prices will be lower than what they are penciling in.”

Running a deficit will be tricky because western sanctions have restricted access to financial markets. Major Russian companies targeted by the U.S. and Europe are unable to take out long-term loans. As a result, they are turning to the Russian state for funds. That has worked so far, but a Bloomberg report outlines an emerging fight within the Russian elite over a dwindling pile of money.

The mid-September arrest of Vladimir Evtushenkov, the head of oil company OAO Bashneft, was a sign that the situation is starting to deteriorate. He is the richest Russian arrested since Mikhail Khodorkovsky was thrown in jail in 2005 and whose oil company, Yukos, was taken over by the state. Evtushenkov, an ally of Prime Minister Dmitry Medvedev, is thought to have been arrested because of a growing rift in Russia’s elite that is at least partially due to the troubled economy.

Related: Europe Seeks To Undermine Russian Energy Influence

“This is creating a dire financial situation, particularly for state companies friendly to Putin, which are now vying for shrinking state resources,” Yevgeny Yasin, a former Russian economy minister, told Bloomberg. Russian President Vladimir Putin and his allies are hunting for more assets as the economy worsens, according to the same article.

Oil prices could remain low for a while. Reuters reports that the Russian central bank is beginning to plan for a disaster scenario in which oil prices drop to $60 per barrel. Such a scenario would precipitate a dramatic weakening of the ruble, forcing the central bank into action.

But there is no easy way out. The Russian economy is far too dependent on the global price of oil, a volatile benchmark largely out of the Kremlin’s control.

More Top reads From Oilprice.com:

TIME energy

Who is Buying the Islamic State’s Illegal Oil?

Syrian petroleum being wasted in Qamishli
Syrian petroleum is being wasted due to the clashes between Islamic State of Iraq and Levant (ISIL) and Kurdish armed groups. A general view of the wells is seen on September 25, 2014. Anadolu Agency—Getty Images

The terrorist group sells its oil on the cheap

This post originally appeared on OilPrice.com.

In June 2014, computer files captured from a courier for the Islamic State shortly after the fall of Mosul revealed that the group had assets of $875 million, largely gained in the sacking and looting of Mosul and its central bank.

The size of the group’s bank account has now risen to an estimated $2 billion dollars, thanks in part to revenues from ransom paid for kidnapped foreigners and more pillaging. However, oil remains the group’s primary source of income.

The 11 oil fields that IS controls in Iraq and Syria have made it a largely independent financial machine. Reports show that IS-controlled fields in Iraq produce between 25,000 and 40,000 barrels of oil per day, at an estimated value of approximately $1.2 million, before being smuggled out to Iran, Kurdistan, Turkey and Syria.

Related: Islamic State’s Ultimate Goal: Saudi Arabia’s Oil Wells

That doesn’t account for revenue from oil fields that IS has held much longer in Syria, which take the Islamist group’s daily profit to just under $3 million.

But if the regional narrative of IS’s rise is to be believed, the group is universally loathed. How, then, is it so readily finding customers to buy its oil abroad?

Oil smuggling is hardly new in Iraq and Syria — Iran and Turkey have been major conduits for illegal oil exports since the days of Saddam Hussein. Those smuggling rings are still very active, and are now working with IS and contributing to its exploding wealth.

In an interview with CNN, Luay al-Khatteeb, the director of the Iraq Energy Institute, explained that “IS smuggles the crude oil and trades it for cash and refined products, at a refined price,” thanks to its own refineries in Syria.

One important reason that smugglers have been so eager to work with IS is that the terrorist group sells its oil on the cheap. A barrel of oil that would ordinarily sell for over $100 can be discounted as much as 75 percent. But it’s still a profitable sale for IS, as the money it loses from such a discount is more than made up for by the readiness of customers to buy its oil and the plethora of routes through which it can export it.

“The crude is transported by tankers to Jordan via Anbar province, to Iran via Kurdistan, to Turkey via Mosul, to Syria’s local market and to the Kurdistan region of Iraq, where most of it gets refined locally,” Khatteeb explained. “Turkey has turned a blind eye to this and may continue to do so until they come under pressure from the West to close down oil black markets in the country’s south.”

One of the more terrifying aspects of IS’s newly found wealth is that it is no longer based on the traditional donor model, in which rich sympathizers in the Middle-East and the West pour generous funds into training and capacity-building of fresh jihadists. IS’s goal has always been to form a caliphate, and although no country would recognize it as such, it is running the territory it conquers as a state, albeit through illegal means; IS is pumping, refining and selling oil, just like any other petro state.

What’s more, now that it controls fertile provinces in western Iraq, such as Anbar and Nineveh, the group also now sits on 40 percent of Iraq’s wheat crop, and can force farmers to deal only with them, sometimes for no pay. Baghdad is now worrying about a medium-term food crisis, since 20 percent of its stores are in IS-held territory and thousands of farmers have fled.

Related: Eliminating The Scourge Of Islamic State In Iraq

Clearly, there’s a stark difference between the financial operations of IS and those of Al-Qaeda and other international terrorist organizations. U.S. President Barack Obama recently admitted that his administration and the intelligence community had underestimated IS, which now looks like a nightmare to Washington.

The group has captured American military-grade weaponry and equipment and freed from jail former soldiers who know how to use it. It is independently rich but operates outside the normal fiscal system, which means conventional financial sanctions can’t touch it. It has set up its own illicit trading networks in an area it controls with an implacable totalitarianism. It effectively combines political terror, religious zealotry and financial muscle to bend local populations to its will.

IS’s powerful economic engine may not guarantee that it will one day peacefully rule the territory it claims, but $3 million a day more than assures that it can continue financing its fight to do so.

More Top reads From Oilprice.com:

TIME Economy

Why Everyone Who Lives in Alaska Is Getting $1,884 Today

North slope oil rush Alaska
The North slope oil rush in Alaska, circa 1969 Ralph Crane&—The LIFE Picture Collection/Getty Images

That's enough to buy a trip to somewhere warmer

If polar bears and Snow Dogs weren’t enough to make you want to move to Alaska, consider this: You can get paid thousands of dollars a year just for living there.

Today, Oct. 2, almost every permanent resident of Alaska — even babies — will get paid $1,884 as a dividend from the state’s Alaska Permanent Fund, a government fund that invests proceeds generated from the state’s oil reserves to ensure future wealth for the state.

When the first dividend checks were issued to residents in 1980, TIME predicted that the windfall would be long-lasting:

Nor is there any end in sight to the flow of dividends from the oil fund, which by the end of this year is expected to total more than $1 billion. Oil price increases could also continue to swell the fund. While most Americans complain bitterly every time OPEC members raise prices, Alaskans have reason to applaud. With the price of domestic oil now decontrolled, Alaskan crude can rise to the world level; thus the state’s royalties will grow with each foreign price hike.

Today the Alaska Permanent Fund is valued above $50 billion, and the dividend paid to residents this week will total $1.1 billion.

And for the individual who’s squirreled away his dividend payment each year since the program launched in 1980? He’s made a cool $37,000 just for being loyal to the state.

Read more about the origins of the Alaska Permanent Fund in TIME’s archives: Alaska Bonanza

TIME energy

Why King Coal Will Keep Its Crown

A coal plant looms behind a traditional house in Tianjin, China
A coal plant looms behind a traditional house in Tianjin, China Frederic J. Brown—AFP/Getty Images

The challenge of unseating the most polluting power source on the planet

This post originally appeared on OilPrice.com

For climate change activists and those hoping for an energy future dominated by renewables or even less-polluting natural gas, the death of coal cannot come quickly enough. But with coal still the dominant form of cheap electricity throughout the world, it is unlikely the bogeyman of climate change will disappear anytime soon.

That’s because the price of coal, compared to other fuels, is just too good to refuse. Just look at China, where the country’s double-digit economic growth has largely been fueled by coal, which fulfills 60 percent of its energy mix.

According to a chart showing the levelized cost of energy — the price at which electricity must be generated from a source to break even — coal is the second-cheapest form of energy behind hydropower, at $40 per megawatt hour.

Compare that to the cost of nuclear at $60, natural gas at $70, and solar — which at $280 per MWH, is seven times the cost of coal. Coal is also plentiful, relatively easy to extract — though admittedly dangerous if mined underground — and requires minimal processing. And it can be used for power generation (thermal coal) or steelmaking (metallurgical coal).

Of course, coal-fired plants have exacted an enormous price on air quality, and the Chinese government – which has declared war on pollution — recently banned the use of coal in smog-cloaked Beijing. Last week, it was announced that for the first time in over a decade, Chinese coal imports and coal consumption both dropped.

While that may seem like a dart in coal’s balloon, coal’s continued use elsewhere is more than making up for China’s restraint.

Germany doesn’t like to talk about it, but the world leader in the use of renewable energy, particularly solar, is also a big consumer of coal. As The Economist recently pointed out, Germany’s production of power from lignite coal is now at 162 billion kilowatts, the highest level since the smokestack-belching days of East Germany.

The same article notes that Japan, which has no natural energy resources of its own and is scrambling to meet electricity demand — most of its nuclear reactors have been offline since the 2011 Fukushima disaster — approved a new energy plan in April that includes coal as a long-term electricity source. The Japanese have also invested almost $20 billion in overseas coal projects in the past seven years, according to the Natural Resources Defense Council.

In the United States, even though a shale-gas supply boom has seen many utilities shift to cheaper natural gas, the country will still be generating a third of its energy from coal by 2040 (only 10 percent less than now), according to the U.S. Energy Information Administration (EIA). That’s despite a concerted effort by the Obama administration to force the nation’s coal-burning power plants to reduce their carbon emissions by a third over the next 15 years.

U.S. coal producers have responded to the trend of falling domestic consumption by exporting more coal overseas. A Wall Street Journal chart shows exports of U.S. coal grew from around 50 million metric tons in 2000 to 106.7 million MT in 2013. Most U.S. coal is destined for Europe, with Brazil, South Korea and China close behind.

All of this is not to suggest that coal producers haven’t had their problems. The price of benchmark thermal coal over the past three years has dropped from more than $130 a ton to around $80. Metallurgical coal is also at a six-year low.

Despite a huge cutback in production, the coal market continues to be oversupplied. As Oilprice.com pointed out recently, waning steel demand in China has forced mines in Australia to close. Australian producers are also threatened by Chinese plans to build more rail capacity for its domestic coal, which would undermine its coal imports.

In the United States, coal producers are finding it increasingly difficult to lock utilities into long-term contracts that provide stability and protection from price fluctuations. That’s because the utilities want the flexibility to have short-term contracts, or even buy coal on the spot market, since natural gas continues to be a competitive option.

Looking ahead, though, there doesn’t appear to be a declining demand curve for coal. Consider this: in Africa, some 60 percent of the continent’s population, or more than 600 million people, do not have access to electricity. The EIA predicts African coal consumption will rise by 70 percent by 2040. In India, another big consumer of coal, 300 million people remain disconnected to the electricity grid. The country plans to increase its use of renewable energy by 15 percent by 2020, but still faces the challenge of energy demand exceeding supply by 10 percent.

Coal is a likely contender to fill that gap. A recent article in Australian Mining states that by 2025, India’s electricity generation from coal will be reduced from 60 percent to “only 50 percent of installed generation – but that doesn’t necessarily mean less coal generation.”

In the end, it all comes down to price and government policies. If the economics of coal can be beaten by other electricity sources, the old-school fuel will face pressure, as it already has in the U.S. But as market forces continue to drive the various options available for utilities, coal use — particularly in developing nations — is almost certain to go up. Unless governments enact American-style laws to sharply curtail coal power plant emissions, expect King Coal to retain its crown.

Read more at OilPrice.com

Scotland’s Oil Will Remain in British Hands

New Commercial Nuclear Battery Being Developed

Why the Debate Over U.S. LNG Exports Has Been Won

TIME energy

Oil: A Blessing And A Curse For The Middle East

Erbil refinery in Iraq, seen in June 2014.
Erbil refinery in Iraq, seen in June 2014. Onur Coban—Anadolu Agency/Getty Images

The region's supplies of crude have their downside

Originally appeared at OilPrice.com

What exactly is at stake in the battle for control of the Middle East, other than the obvious — the region’s abundant oil and natural gas? And why is it coming to a head now?

There are two aspects to what is currently transpiring in the Middle East: the battle for the region’s natural resources and the battle for the region’s human resources.

The region’s natural resource wealth has long been both a blessing and a curse. It has helped countries like the United Arab Emirates and Oman achieve amazing progress in a relatively short time and make the leap from societies that not long ago were comparable to medieval times into the 21st century.

But as one learns in the study of conflict resolution, change – any change – brings with it a certain amount of conflict. And the changes that oil and gas money brought to the Middle East were phenomenal. In turn, they upset more conservative elements of society who were unhappy to see the “natural order” of things – i.e., the old ways – disrupted and replaced with modern ways.

At the same time, the region’s resources have been a curse because it gave dictators like Iraq’s Saddam Hussein and Syria’s Bashar al-Assad the ability to squander billions of dollars on arms and weapons systems, to wage wars on its neighbors, and to threaten regional security. Syria, for example, with far less revenue from oil than Iraq, invested its modest revenues on increasing internal oppression rather than investing in the country’s future — its people.

Just how rewarding is it for Assad to look at his country today, utterly destroyed, more than 190,000 killed according to the United Nations, many more maimed both physically and psychologically, the infrastructure totally devastated? Yet he remains at the reins. He is now president of parcels of territory eroded by war.

Oil wealth has also allowed tiny counties, like Qatar, to assume an outsized role in the region and meddle in its neighbor’s politics, certain that its money can buy it anything, including influence. But what money cannot buy is critical thinking, which is what appears to be lacking most in the region.

Related: Oil Companies Turning Away From The Middle East

The second aspect of why the Middle East is going bonkers today is that the existing borders are based on Western colonial thinking. In many places, one country ends and another begins at a line in the sand drawn by a Frenchman and a Brit who divided up the spoils of the Ottoman Empire at the close of World War I.

This is why, for example, the Islamic State (IS) became so powerful in Syria and in Iraq — for them and the fighters who join them, there are no borders, no demarcation lines and no frontiers.

Why is IS so powerful, yet so little is known about who they are? From the little we know about them is that that the core of the officers corps comes from the remnants of Saddam Hussein’s army that went underground when the U.S. invaded in 2003.

Professor Amazia Baram, chair of Arab studies at Haifa University and an expert on Iraq under Hussein, explains that when the late dictator was still a lower echelon thug working for his cousin — who took power in a military coup – the family was overthrown but managed a comeback.

Once back in power, Saddam was given the task of setting up an underground system of operations from which the regime could recover in the event of a future coup. Saddam, according to Baram, excelled in securing back-up plans and in the process got rid of the top man and placed himself at the head of the state and party. Saddam never forgot the importance of maintaining the emergency fallback protocol and although he is now gone, his former generals have, by all appearances, taken over the network and placed it at the disposal of IS.

As the United States and its Western allies again get drawn into a Middle East war, this time it might be more constructive if they went in with something more than shock and awe.

Related: Does UAE Conscription Law Signal the End of the Dream?

Eliminating the IS threat militarily alone will not suffice. What is needed here is a viable “Marshall Plan” adapted for the Middle East where reforms are made in the education sector, where democratic principles are gradually introduced, and where the people are given voice in participating in the affairs of state and invited to join in governance, rather than being locked out of any decision making process.

As the map of the Middle East is being redrawn, so too must change be introduced into the very core of the region’s socio-political system.

Read more at OilPrice.com

Scotland’s Oil Will Remain in British Hands

New Commercial Nuclear Battery Being Developed

Why King Coal Will Keep Its Crown

TIME Syria

This Time, U.S. Goes to War Against Oil, Not For It

U.S. and allied warplanes attacked a dozen ISIS refineries in eastern Syria on Wednesday. DoD

Attacks on ISIS refineries are designed to choke off funding for terror group

Some maintain that the Pentagon is a self-licking ice cream cone, dedicated to its own preservation. If that’s true, it’s also worth noting that an expanding terrorist state is an oxymoron—one that will eventually collapse from its own internal contradictions.

The fact that the U.S. and its allies attacked a financial hub of the Islamic State in Iraq and Greater Syria (ISIS) on Tuesday–the first day of strikes in Syria—and spent Wednesday and Thursday bombing its oil-production facilities, highlights ISIS’s predicament.

Unlike a smaller terrorist organization—al-Qaeda, for example—ISIS now occupies, and purports to govern, a wide swath of desert straddling the Syrian-Iraqi border. It needs the estimated $2 million a day it’s grossing by smuggling oil because many, if not most, of its 30,000 fighters are in it for the cash, not the ideology. But the refineries represent only a small slice of ISIS’s oil revenues. It makes most of its money from crude oil, and the U.S. has refrained so far from attacking oil fields in the region.

If the money eventually dries up, Pentagon officials believe, many ISIS fighters will head back home. The terrorists control about 60% of Syria’s total oil production, according to a Syrian opposition estimate.

“Substantial uncertainty pervades our understanding of the mechanics, volume, and revenue associated with the terrorist group’s black market petroleum operations,” the Senate Energy Committee said in a report released Wednesday. “Depriving ISIS of whatever dark revenue pool it generates from its sales of oil will put additional strain on an organization with little capacity to expand its oil field operations.”

The U.S. and its allies damaged a dozen small ISIS refineries in eastern Syria on Wednesday. DoD

Wednesday’s attacks by six U.S. and 10 Saudi and United Arab Emirate warplanes took all 12 targeted refineries offline, U.S. intelligence believes. “They’re not going to be using these refineries for some time,” Rear Admiral John Kirby, the Pentagon spokesman, said. “We’re trying to remove the means through which this organization sustains itself.”

Generating such revenue requires industrial-like facilities, which can go from money-makers to targets in the flash of GPS-guided bomb.

That highlights an edge the U.S. and its allies have on ISIS. Sure, the terror group’s recruits, armed with AK-47s and pickup trucks sporting machine guns, can take over small refineries sprinkled across eastern Syria. But once they have them, they can’t keep them running under aerial assault.

Pentagon officials acknowledge they don’t know how long it will take for the lack of oil money to begin having an effect. But they know what they are looking for. “We’ll know when they have to radically change their operations,” Kirby said. “We’ll know when we can see that they no longer are flowing quite as freely across that [Syrian-Iraq] border. We’ll know when we have evidence that it’s harder for them to recruit and train, or they just aren’t doing as much training and recruiting.”

That’s the conundrum ISIS faces as it tries to expand and become a functioning state: so long as the rest of the world isn’t willing to let that happen, ISIS eventually will have to revert to becoming a poorer and smaller—though still dangerous—group.

TIME energy

How College Kids Helped Divest $50 Billion From Fossil Fuels

Stephen Heintz, President of the Rockefeller Brothers Fund, Valerie Rockefeller Wayne, the chair of the fund, and Steven Rockefeller.
From left: Stephen Heintz, President of the Rockefeller Brothers Fund, Valerie Rockefeller Wayne, the chair of the fund, and Steven Rockefeller, a son of Nelson Rockefeller and a trustee of the fund, in New York, Sept. 16, 2014. Hiroko Masuike—The New York Times/Redux

The groundwork for an announcement by heirs to the Rockefeller fortune was years in the making

Environmentalists hope Monday will come to be viewed as an “economic tipping point” in the battle against climate change.

More than 700 investors pledged to divest their holdings from fossil fuel companies, just a day after an estimated 400,000 demonstrators marched through the streets of New York to demand that world leaders take action to stop climate change at a United Nations summit this week.

The divesting organization garnering all the headlines is the Rockefeller Brothers Fund, a respected charity that is run by the heirs of John D. Rockefeller, who built his fortune refining oil at Standard Oil Company. The Rockefeller Brothers Fund and about 50 other foundations have a combined $4.2 billion in assets total, which will no longer be invested in fossil fuel companies. Combined with individual investors and other institutions, such as colleges and faith groups, a total of $50 billion assets has been pledged to not be invested in fossil fuel companies. “It’s not huge, but its a very important signal to the market,” says Stephen Heintz, President of Rockefeller Brothers Fund.

For recent University of California, Berkeley graduate Katie Hoffman, the idea that the heirs of an oil tycoon would reroute billions of dollars away from fossil fuel companies was laughable when she began advocating that her school divest from those businesses in 2011. But it was she and other college activists who actually gave the divestment movement legs in its nascent days. “We’ve been integral in the process, and that’s been seen by folks who are actually driving and funding the movement,” Hoffman said at the event in New York where the Rockefellers announced their intentions Monday. “We have a stake in this. This is our future.”

The divestment movement began at Swarthmore College, a small Pennsylvania liberal arts school, in 2011. Students there, who could visibly see the impact that coal mining was having on the nearby Appalachian Mountains, began advocating that their school divest its billion-dollar endowment out of the largest companies that profit from drilling for and distributing fossil fuels. “In asking for divestment, we are implicitly stating that investment is a choice,” Mountain Justice, Swarthmore’s student-led divestment advocacy group, says on its website. “ It is a political choice with global consequences. Choosing to invest in an industry means financially endorsing that industry’s practices.”

Students at other schools, like Hoffman at UC Berkeley, quickly picked up the fight. Overall, 400 college campuses now have active divestment movements. The campaigns mirror previous efforts to deal with moral and political issues via economic means. In the 1980s, it was college students that first pushed their administrators to divest holdings from companies doing business in South Africa, where the racist regime of apartheid still reigned. More recently, prominent schools such as Harvard and Brown divested from companies operating in Sudan because of atrocities occurring in Darfur.

The calls for fossil fuel divestment had, until this point, been met with a more muted response. Despite birthing the movement, Swarthmore has continually maintained that divesting would hurt the school’s endowment, which it says it not meant to be used to advocate for social purposes. The UC system shot down a student-led divestment proposal last week. Other schools with large endowments, like Harvard and Brown, argue that divestment is a symbolic move that won’t affect energy companies’ bottom lines, or that more positive change can be made through shareholder activism.

Still, there has been some progress for advocates. A total of 15 colleges have divested from fossil fuels, according to Arabella Advisors, a consultancy firm for philanthropies. The most notable is Stanford University, which agreed in May to divert its $18.7 billion endowment away from coal companies. Activists hope that the big names associated with Monday’s divestment announcement, including the actor Mark Ruffalo, will encourage more schools and other organizations to divest. “This movement has gone beyond higher education,” says Jess Grady-Benson, a recent graduate of Pitzer College, which agreed to divest from fossil fuels in April.

Despite the movement’s growth, young people continue to play a central role. Divestment activism is likely to spread to many more campuses as the school year gets underway. “Youth have always gone to the conferences or the parties, but we’re always outside,” Hoffman says. “Divestment gets us in the board room, which is really exciting.”

TIME Environment

See the Worst Place to Breathe in America

It's not Los Angeles

If you think about smog, you’re probably picturing a major city like Los Angeles, where in the 1960s and ’70s the air was so bad that smog alerts telling people to avoid outdoor activity were regular occurrences. The air has improved in L.A. and other big cities in recent years, thanks to cleaner cars and air-pollution regulation.

But the real capital of air pollution in the U.S. is a farming city that sits to the northwest of L.A.: Bakersfield.

Bakersfield is in the San Joaquin Valley, a major agricultural area that stretches through much of California. The San Joaquin Valley contains some of the richest, most productive agricultural land in the country. But its geography — the valley is surrounded on all sides by mountains — creates a bowl that traps air pollution. Levels of soot and ozone — which in warm weather, which the valley has much of the year, can create smog — are some of the highest in the country. And while air in much of the U.S. has improved, in Bakersfield and other towns in the southern San Joaquin Valley, the air quality is as bad as ever — if not worse.

How bad? School officials in Bakersfield have used colored flags to indicate air quality: green for good, yellow for moderate, orange for unhealthy for sensitive groups and red for unhealthy for all groups. But this winter, the air became so bad that officials had to use a new color on the worst days: purple, even worse than red. Because of high levels of air pollution, asthma is prominent throughout the region, and the bad air can also raise levels of respiratory and cardiovascular disease.

Photographer Lexey Swall grew up in Bakersfield, and in this collection of photographs, she shows the human cost of living in one of the most polluted cities in the country. For Bakersfield residents, there’s simply no room to breathe.

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