EPA’s proposed stay of critical rules curbing methane leakage would undermine climate, public health and the economy say investors.
NEW YORK, NY - WEDNESDAY, AUGUST 9, 2017 - Members of the Interfaith Center on Corporate Responsibility who are investors in the oil and gas sector strongly urge the EPA to follow through with immediate implementation of 2016 regulations to control methane leaks from fracking operations in natural gas production.
As the EPA considers a stay on certain requirements of the Emission Standards for New, Reconstructed, and Modified Sources for the Oil and Gas Sector, faith and values investors made their case against any delays at an EPA hearing on July 10th and again in a letter signed by 67 institutions representing US$292 billion in managed assets sent yesterday to the EPA’s Peter Tsirigotis, Director of the Policies and Programs Division.
Investors pointed to hundreds of community groups across the U.S. that have been calling for tighter regulation of methane leaks from oil and gas operations that, due to the widespread use of horizontal fracking, are increasingly found in people’s back yards. The known health impacts from methane leaks, which include cancer and asthma, could be avoided with the improved methane management included in the new rule, investors argue.
Methane is a greenhouse gas with heat trapping potential 86 times greater than carbon dioxide, and a leading contributor to climate change. Left unchecked, the industry’s methane leakage is projected to increase around 25 percent over the next decade, with significant impacts on the health of vulnerable people and the environment.
Methane also mixes with other air pollutants in smog, with health impacts for the most vulnerable people in communities near oil and gas facilities, particularly children, the elderly and those we are most responsible to protect from harm,” said Mary Minette of Mercy Investment Services. “The oil and gas industry is the leading industrial source of methane pollution. Natural gas is often touted as a “bridge fuel,” with lower-carbon properties when used to generate energy than other fossil fuels; however, if methane emissions are not addressed, they will undermine natural gas’ reputation as a cleaner energy source.”
Said Sr. Nora Nash of the Sisters of St. Francis of Philadelphia, “As a citizen, I witnessed the severe impacts of contaminated water and polluted air in one community in Washington County, PA. The State has begun to recognize the serious implications of an unregulated industry and is now grappling with new methane policies. An EPA delay on the implementation of the methane pollution standards would be a tragedy for the communities in our state.”
In the spring of 2016, ICCR joined institutional investors collectively representing $3.6 trillion in AUM in a letter of support for effective methane regulation. Investor support for such regulations stems from the understanding that curbing methane emissions from all sources in the oil and natural gas value-chain will help limit climate change, promote economic growth and, importantly, provide regulatory clarity for industry and investors.
“Our dependence on fossil fuels is fundamentally impacting our planet, putting at risk the life-sustaining environment on which we all depend,” said Sr. Susan Vickers at Dignity Health. “On behalf of the health of our families and the communities that we serve, we urge the EPA to implement the methane pollution standards without delay. Only through a long-term commitment to transitioning to a low carbon economy can we as work towards a sustainable future for the United States and the planet as a whole.”
Apart from the serious climate and community risks of uncontrolled methane leaks, investors argue the EPA’s proposed delay would hurt the energy sector through the waste of saleable natural gas and by substantially increasing the reputational risk attached to the production of natural gas. Delay would also jeopardize thousands of jobs in the methane mitigation industry. These risks will have broader based economic impacts for the country, investors say.
Jaime Bonham at NEI Investments in Toronto said,“Despite real efficiency gains by some parts of the industry in regard to its methane emissions, investor concern about methane leakage has only grown since the EPA methane rules were first proposed. That is because of the very material impact methane leakage, if left unchecked, could have on the industry. Just this year, a new international investor initiative was launched to engage oil & gas companies on methane risk and mitigation strategies. The initiative includes investors from the U.S., Canada, Europe, Latin American, New Zealand and Australia, indicating that methane is now truly a global issue amongst investors. They are closely watching how the U.S. handles the regulation of this key issue and expect the U.S. to not impede the early leadership it has shown.”
The comment letter is signed by 67 institutional investors representing US$292 billion.
About the Interfaith Center on Corporate Responsibility (ICCR)
Celebrating its 46th year, ICCR is the pioneer coalition of shareholder advocates who view the management of their investments as a catalyst for social change. Its 300 member organizations comprise faith communities, socially responsible asset managers, unions, pensions, NGOs and other socially responsible investors with combined assets of over $200 billion. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. www.iccr.org