Investors release report demonstrating advances in assessing/disclosing methane leaks during oil and gas production as EPA plans yet another repeal of climate change regulations.
NEW YORK, NY, WEDNESDAY, SEPTEMBER 12TH, 2018 – Today, the Interfaith Center on Corporate Responsibility released a report demonstrating the impact of investor engagement with energy companies in advancing improved management of methane leaks during oil and gas production.
The report tracks the significant gains made with energy companies, including EOG Resources ($EOG), EQT Resources ($EQT) and Southwestern Energy ($SWN), that are part of a focused methane campaign with the goal of improving disclosure, reducing emissions and reporting critical information on methane management efforts, such as leak detection and repair (LDAR).
Methane has been identified as a super greenhouse gas due to its extreme potency in the short term: While the second largest source of greenhouse gas emissions in the United States behind CO², methane has a significantly more intense warming effect than CO2. Over 100 years, methane's warming impact is estimated to be 30 times that of carbon dioxide.
ICCR’s investor network has engaged the private sector on climate challenges and opportunities since 2002 and has been active in advocating for a transition to a more sustainable and equitable economy. Resolutions requesting greater disclosure of methane risks from fracking operations were filed by ICCR members as early as 2008.
“Investors are increasingly concerned about the impacts of unnecessary methane leaks, which not only damage the environment, but represent valuable lost product that can be captured with the right practices. Many of the companies engaged by ICCR investor members acknowledge as much,” said Jeffery W. Perkins, Executive Director, Friends Fiduciary Corporation.
This report evaluates twenty-three upstream and midstream oil and gas companies on thirteen methane-specific metrics considered material by ICCR’s investor network. Many of the metrics were adapted from The Environmental Defense Fund’s 2018 report Disclosure Divide: Revisiting Rising Risk and Methane Reporting in the U.S. Oil & Gas Industry.
The ongoing investor campaign has been effective in highlighting the need for energy companies to adopt intensity and absolute targets for methane emissions, and to address the problem of super-emitters -- large, unexpected and unpredictable methane leaks -- that are associated with high pressure fracking equipment. Methane regulations requiring more frequent monitoring of well sites and management of high-pressure equipment, such as that adopted with the cooperation of companies in Colorado, has been proven successful and cost-effective in reducing leaks. Investor engagements seek to underscore this success.
"Companies acknowledge the need for regulations on methane emissions. Regulations can level the playing field for companies adopting best practices plus protect the reputation of natural gas that some tout as a 'clean fossil fuel,'” said Steven Heim of Boston Common Asset Management. "If the total methane leak rate from well-head to burner tip is 3% or more, natural gas can be just as bad as coal for the climate when burned for power generation. Forward-looking companies understand this presents not only a climate risk, but a significant business risk from slashed demand."
In June of 2016, the Environmental Protection Agency issued rules requiring oil and gas companies on new and modified infrastructure to find and repair leaks on all significant sources, and to use cost-effective technologies and practices to limit methane emissions from hydraulically fractured oil wells, pneumatic controllers and pumps, and compressors.
But according to a report in the NY Times, this week the EPA announced that it would follow through with long-threatened plans to rollback these regulations, weakening requirements that companies monitor and repair methane leaks, and repealing a restriction on the intentional venting and “flaring”, or burning, of methane from drilling operations. As thousands gather this week in San Francisco for the Global Action Summit to share their experiences of effective action to mitigate climate change, investors will be looking carefully at where pro-climate investments can be made.
“This Administration is not doing the oil and gas industry any favors by walking back the sensible and cost-effective regulations supported by trillions of investment dollars in 2016. We need less pollution, not more,” said Christina Herman, ICCR’s Program Director for Climate Change and the Environment. “And as our report demonstrates, regardless of backsliding by this administration, companies are continuing to move forward on methane management.”
About the Interfaith Center on Corporate Responsibility (ICCR)
Celebrating its 47th 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 $400 billion. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. www.iccr.org