The University of Chicago’s Hull Gate, logos of Shell and BP, which UChicago invests in, and protesters against the Dakota Access Pipeline. UChicago invests in DAPL’s owner, Energy Transfer.
As dozens of universities and colleges move to divest from fossil fuels in the face of mounting climate catastrophe, tax filings from the University of Chicago reveal at least two dozen investments in funds that bankroll oil and gas companies, including several Big Oil supermajors, companies behind controversial operations like the Dakota Access Pipeline, and one company that’s owned by a far-right Texas oil billionaire who has helped drive that state’s backlash against women’s rights, LGBTQ rights and voting rights.
We analyzed UChicago’s most recently available Form 990-T, where tax-exempt organizations report “unrelated business income,” which includes income from investments structured as limited partnerships, like private equity investments and pipeline partnerships. UChicago’s filing reveals that the university currently has, or recently has had, extensive investments in fossil fuel behemoths like BP, Phillips 66 and Shell, as well as major pipeline companies Energy Transfer and Plains All American Pipeline. Moreover, the university is invested in numerous fossil fuel funds overseen by firms with stakes in dozens of oil and gas companies.
All this comes as David Rubenstein, a private equity billionaire whose firm Carlyle Group has extensive fossil fuel investments, became the chairman of UChicago’s Board of Trustees a year ago. Rubenstein has repeatedly and publicly professed his fondness for oil and gas investments.
UChicago students, faculty and graduate workers have repeatedly spoken out on the climate catastrophe and called on the university to divest from fossil fuels, but the recent filings show that UChicago remains massively invested in oil and gas companies whose core business operations generate huge amounts of carbon emissions.
While UChicago’s filings reveal extensive investments in fossil fuels, specific details on those investments, including which investments are still current, which may have been rolled over into new fossil fuel funds, and new investments since mid-2021, have not been disclosed. Moreover, the university is invested in numerous other funds, raising questions about what other controversial business operations it could be bankrolling and profiting from.
Big Oil Majors
According to UChicago’s Form 990-T, the university has direct investment partnerships with at least three of the world’s biggest oil and gas companies.
- BP: UChicago is invested in BP Midstream Partners, a subsidiary of BP. According to the 2017 Carbon Majors Report, BP was responsible for the 11th most greenhouse gas emissions of any company, state-owned or private, between 1988 and 2015. In February, BP reported record profits of $27.7 billion for 2022 while announcing that it was reversing its decision to drill for less oil and gas and lowering its pledge for carbon reductions.
- Shell: UChicago is invested in Shell Midstream Partners, a subsidiary of Shell. According to the 2017 Carbon Majors Report, Shell was responsible for the 9th most greenhouse gas emissions of any company, state-owned or private, between 1988 and 2015. In February, Shell reported its highest profits in company history, a whopping $39.9 billion during 2022. Shell is also backstepping on its climate pledges.
- Phillips 66: UChicago is invested in Phillips 66 Partners, which is part of Phillips 66, the huge multinational oil and gas company that is the downstream spin-off of ConocoPhillips. Phillips 66 operates over a dozen refineries and has a joint petrochemical venture with Chevron.
Energy Transfer and the Dakota Access Pipeline
UChicago disclosed two investments that link it to the controversial Dakota Access Pipeline (DAPL): a direct investment partnership with Energy Transfer, which built and owns DAPL, and an investment in ArcLight Energy Partners Fund IV, with portfolio companies that merged with Energy Transfer.
Energy Transfer (formerly Energy Transfer Partners) built the 1,172-mile DAPL to transport crude oil drilled from the ground in the Bakken oilfield in North Dakota. The pipeline can transport up to 750,000 barrels of oil per day. The construction of DAPL sparked one of the largest sustained protests for climate justice in U.S. history: the Indigenous-led opposition near the Standing Rock Sioux Reservation in North Dakota. According to the Intercept, Energy Transfer paid mercenaries to infiltrate and surveil protest camps.
Energy Transfer is owned by Kelcy Warren, a multi-billionaire who donated nearly $12 million towards Donald Trump’s reelection in 2020, including a single donation of $10 million to a pro-Trump SuperPAC. Warren also gave $1 million to Texas Governor Greg Abbott, one of the most powerful and far-right U.S. governors, after Warren profited handsomely from the Texas electric grid collapse in 2021.
UChicago may also have financial ties to DAPL through its investment in ArcLight Energy Partners Fund IV. ArcLight is an energy-focused private equity firm that had a large stake in an oil and gas company called Enable Midstream that was acquired by Energy Transfer in 2021. SEC filings show that ArcLight Energy Partners Fund IV consistently sold off Enable Midstream stock from 2014 to 2017. While it is unknown if the fund continued to have a stake in the company when it was bought by Energy Transfer, the fund’s last available public filing from July 17, 2017, says ArcLight still owned 43,238,773 shares of the company’s stock.
In October 2016, UChicago’s graduate student union passed a resolution against the Dakota Access Pipeline. It is unclear if the university was invested in Energy Transfer when this resolution was passed.
ArcLight Capital: Peaker Plants, Gas Pipes, Oil Rain
UChicago reported investments in both ArcLight Energy Partners Fund III and Fund IV. ArcLight’s funds are invested in a broad range of oil and companies, including deeply controversial operations tied to stark cases of environmental injustice.
ArcLight’s portfolio shows it currently has stakes in many fossil fuel companies and operations, including:
- Gulf Coast Express Pipeline, a nearly 450-mile pipeline that sends fracked-gas from the Texas Permian Basin to the Gulf Coast. It is run by pipeline giant Kinder Morgan and is looking to expand.
- Natural Gas Pipeline Company, a huge gas pipeline system that serves the Chicago area and Gulf Coast LNG export terminals.
- Third Coast Midstream, an offshore oil pipeline company that operates along the Louisiana coast in the Gulf of Mexico.
- Ridgetop Royalties, focused on fracking land rights in the Marcellus Shale region.
ArcLight has owned a number of extremely controversial fossil fuel projects. One of these is the Limetree Bay oil refinery, which “rained oil” over the Virgin Islands in 2021 in one of the worst environmental justice disasters in recent memory. ArcLight acquired the refinery in 2015 and worked closely with the Trump administration to reopen it after it had been forced to pay numerous fines. Then in 2021, just months after its reopening, the EPA invoked emergency powers to halt the refinery’s operations, citing multiple polluting incidents that impacted the local community. Around 75% of people living just north of the plant are Black and a quarter fall below the national poverty line.
Additionally, ArcLight has owned ultra-dirty peaker plants in New York City that have been the focus of environmental justice protests, a coal-fired power plant in southern Ohio that the EPA ordered in November 2022 to stop dumping toxic coal ash into unlined storage ponds, and a central New York power plant that spilled over 45,000 gallons of oil into Lake Ontario in 2021.
CrownRock and the Texas Far-Right
One of UChicago’s most controversial investments is with Lime Rock Partners IV, a fund that bankrolls the oil operations of a Texas billionaire named Tim Dunn who has played an outsized role in funding and driving the Texas far-right over the past decade, especially its efforts to eliminate abortion rights and same-sex marriage and limit the rights of transgender people.
Lime Rock Partners is an energy-focused private equity firm that funds the operations of CrownRock, one of Texas’s top oil and gas producers. CrownRock is a joint venture between Lime Rock and CrownQuest, the latter which carries out the partnership’s drilling operations.
Tim Dunn is the CEO of both CrownQuest and CrownRock. He is a far-right oil billionaire who — as we have previously reported — has thrown millions of dollars into a range of conservative causes in Texas. For years he bankrolled and chaired the influential group Empower Texans, which supported far-right politicians in Texas and championed attacks on women’s rights and LGTBQ people, including Texas’s attempt to pass a “bathroom bill.” Dunn has played a huge role in turning Texas into one of the most politically far-right states today and one of the states that is most hostile to LGBTQ people. Dunn remains active in supporting far-right candidates in Texas.
UChicago directly invests in a fund that bankrolls the business operations that create and reproduce the wealth Tim Dunn uses for his far-right political efforts. The university reports a partnership with a specific fund named “Lime Rock Partners IV AF.” As Bloomberg has reported and as Lime Rock states, the “vast majority of the asset value” of this specific fund comes from its stake in CrownRock.
This means that UChicago is directly investing in and profiting from the business operations of one of Texas’s leading far-right billionaires who has played an outsized role in funding attacks on abortion rights and LGBTQ rights in Texas.
In early 2020 LittleSis published an exposé on how the University of Michigan was also helping to bankroll Tim Dunn’s business operations. Shortly after this was published, UMich’s newspaper published a story on it, and the university soon announced that it was freezing its fossil fuel investments.
In addition to CrownRock, Lime Rock is also invested in numerous other fossil fuel operations.
UChicago invested in numerous other fossil fuel companies and funds
UChicago invests with a number of other energy-focused private equity firms whose funds have stakes in dozens of oil and gas companies:
- EnCap Flatrock Midstream has realized and current stakes in over three dozen oil, gas and coal companies. UChicago is invested in three of the firm’s funds.
- Cadent Energy Partners has over a dozen past and current stakes in oil, gas and coal companies. UChicago is invested in one of the firm’s funds.
- Bayswater Elgin Natural Resources has several funds dedicated to oil and gas exploration. UChicago is invested in its Fund III that invests in drilling operations in Texas, Colorado and Wyoming.
- Natural Gas Partners has billions invested across around two dozen oil and gas companies. UChicago is invested in the fund Natural Gas Partners IX.
- Old Ironsides Energy, which is invested in over a dozen oil and gas companies. UChicago reports a partnership with the firm’s Fund III-A.
UChicago also has direct partnerships with oil companies that include:
- Western Midstream Partners, one of the leading oil and gas pipeline companies whose Texas operations transport fossil fuels from drilling operations that occur in the Permian Basin, the world’s busiest oilfield.
- Magellan Midstream Partners, an Oklahoma-based company that “stores and distributes refined petroleum products and crude oil.”
- Genesis Energy, a Houston-based midstream company whose offshore operations help transport oil and gas from “the deepwater Gulf of Mexico to onshore refining centers in Texas and Louisiana.”
It should be noted that all this is just a partial list of the exceptional amount of UChicago’s investments in funds that are explicitly dedicated to financing fossil fuel operations.
UChicago Board of Trustees Led by Private Equity Oil Billionaire
As we’ve noted before, the Chairman of UChicago’s Board of Trustees, David Rubenstein, is the billionaire co-founder and co-chairman of Carlyle Group, one of the world’s biggest private equity firms. Carlyle has billions invested in more than two dozen oil and gas companies whose operations include power plants, fracking projects and oil and gas pipelines.
Carlyle Group has one of the largest fossil fuel portfolios of any private equity firm in the world, which are documented on pages 16-21 of this Private Equity Stakeholder Project’s 2021 report. As we wrote last year, some of the most controversial of Carlyle’s investments have included:
- Carlyle and Rubenstein have plunged $1.24 billion into a joint partnership with Hilcorp Energy, the largest private US oil company and one of the dirtiest carbon emitters around. Hilcorp’s operations emit much more methane than Bg Oil powerhouses like ExxonMobil – and methane has more than 80 times the warming power of carbon dioxide.
- Carlyle and Rubenstein have a huge stake in NGP Energy Capital, a Texas-based firm that owns dozens of oil and gas companies. One example of an NGP portfolio company is Permian Basin oil producer Blackbeard Operating, which has been found to emit substantially more methane than Chevron!
- Until recently, Carlyle was the majority stakeholder in Philadelphia Energy Solutions, the dirtiest oil refinery on the eastern seaboard (now-shuttered after a major fire). The refinery, which hovered over the predominantly Black neighborhood of Grays Ferry in South Philadelphia, faced major environmental fines under Carlyle’s management and was responsible for the bulk of toxic air emissions in Philly. In 2018, Reuters documented how Carlyle loaded PES with debt and extracted enormous payouts that contributed to the refinery’s 2018 bankruptcy.
Rubenstein himself has professed a personal affection for oil and gas. During a 2016 interview he bluntly stated: “We do think that carbon-related energy is one of the next areas to invest in in the world.” In the same interview, Rubenstein was asked about which forms of oil and gas investing he likes the best. He responded: “That’s like asking me which one of my children I like the best.” See the video below.
Carlyle opposes divesting from fossil fuels and, as a December 2022 Private Equity Stakeholder report shows, continues to make investments that are incompatible with moving toward a low carbon future.
As chairman, Rubenstein is the most powerful member of the UChicago’s Board of Trustees, but other university trustees also have fossil fuel ties. Examples include:
- Barry E. Fields, a retired partner of law firm Kirkland & Ellis, who has represented BP after the company’s Deepwater Horizon disaster. Kirkland & Ellis has received an F from Law Students for Climate Accountability.
- Emily Nicklin, a Kirkland & Ellis partner, who has also represented BP.
- John Liew, co-founder of AQR Capital Management, an investment firm with fossil and utility industry holdings.
- Michael P. Polsky, the billionaire founder and CEO of Invenergy, which has overseen numerous fracked gas-fired power generation facilities.
- Thomas A. Cole, Senior Counsel and Chair Emeritus of the Executive Committee of Sidley Austin LLP, a law firm that represents fossil fuel clients. Law Students for Climate Accountability graded the firm an F on climate.
- Paul G. Yovovich, President of Lake Capital, which has invested in fossil fuel companies in the past.
- Katherine Adams, who worked for Honeywell, which works with the oil gas industry, for 14 years before joining Apple.
- Richard F. Wallman, retired Chief Financial Officer of Honeywell.
What Will UChicago Do?
As the world’s climate catastrophe accelerates and as calls for serious climate action grow, it remains to be seen whether the University of Chicago will move away from the immense extent that it is directly funding fossil fuel operations that are driving that crisis. Numerous institutions of higher education – from Harvard to the University of Michigan to the University of California to Princeton – have moved towards divesting from fossil fuels, but not UChicago.
Numerous members of the UChicago communities – from undergraduate students to graduate workers to faculty – are demanding the university be more transparent about its investments and address its role in helping to finance the fossil fuel industry. With growing revelations of the extent to which the university invests in fossil fuels, these efforts around transparency and divestment may gain more traction.