Harvard Management Company: Private equity has opportunity to step up on methane

Earlier this year, we had the opportunity to sit down with Michael Cappucci, Senior Vice President of Compliance and Sustainable Investing at Harvard Management Company (HMC). In a recent blog post, Michael shared his outlook on the methane opportunity for oil and gas companies, along with his opinion on the pace of change within the industry.

Below is the second part of our conversation, where Michael offers new insights on investor ESG engagement and its correlation to portfolio performance. He also talks about private equity’s somewhat quiet stance on methane, and the sector’s potential to bring about change among mid-size operators who have yet to tackle methane emissions.

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Investors call on BP, Exxon, Shell to defend EPA methane regulations

Last week, investors representing $1.9 trillion assets under management called on 30 oil and gas companies, urging them to publicly oppose the EPA’s proposed weakening of its methane rules. This letter is signed by investors including CalSTRS, the New York City Comptroller’s Office, and Robeco, all of which have joined together to say no to these regulatory rollbacks.

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Joint venture methane risk is also a climate opportunity

This blog was co-authored with Meghan Demeter, Program Analyst, EDF

With mounting concern about the state of the climate and increasing speculation about natural gas' role in decarbonizing energy markets, oil and gas companies face growing scrutiny from the public and investors. Some companies are stepping up with pledges to reduce emissions of methane from their worldwide operations.

But there's a catch.  Read more

Comprehensive climate reporting must include methane: New report shows you how

Just last month 13 of the world’s largest oil and gas majors—including ExxonMobil, BP and Shell —came together for a new commitment to reducing a key super pollutant. Methane, the primary component of natural gas, is the second leading contributor to climate change and over 80 times more potent than carbon when leaked into the atmosphere in the short-term. What’s more surprising? The coalition’s new methane target proceeded despite an uncertain regulatory landscape in the U.S.

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Harvard Management Company discusses challenges, opportunities for reducing methane emissions

Last month, we had the opportunity to speak about methane and ESG (Environmental, Social and Governance) investing with Michael Cappucci, Senior Vice President of Compliance and Sustainable Investing at Harvard Management Company (HMC). An early leader in ESG investing, HMC was the first U.S. university endowment to sign the UN-supported PRI ESG investing initiative in 2014.

HMC manages the university’s $37 billion endowment and believes ESG risks can have indirect and direct impacts on a company’s performance. Part of HMC’s work with Principles for Responsible Investment (PRI) includes co-leading a group of institutional investors examining the global efforts underway to limit methane emissions and the opportunities to increase their effectiveness. As HMC’s representative to that group, Michael explains below why methane is a risk for all investors and how far the industry has come in just a few short years.

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3 “Digital Oilfield” trends to watch at Gastech 2018

Four years ago, I stood in the centralized data command center of an American oil and gas company, watching a former colleague remotely adjust infrastructure at wellsites thousands of miles away because an algorithm detected a potential failure. This was the first time I personally witnessed the power of the “digital oilfield.”

Essentially, the “digital oilfield” refers to a transformative effort to bring solutions such as automation, predictive maintenance, and IoT technologies to the world’s oil and gas industry. Oilfield digitization has started to change the way decisions are made, operations are conducted, and facilities are managed across the entire oil and gas value chain. While early adopters are already employing automated and connected innovations to gain a competitive advantage, only a few are applying digitization technologies to address one of the industry’s biggest challenges: methane.

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Methane rollbacks create moment of truth for oil and gas executives

How top energy companies engage in the U.S. methane policy debate in the coming weeks may tell us a lot about the future of natural gas.

As these companies have themselves recognized, the role of natural gas in a world that can—and must—decarbonize depends on minimizing harmful emissions of methane from across oil and gas production and the natural gas value chain. But a recent comprehensive study involving dozens of leading academics and companies around the country found that U.S. methane emissions from industry are 60 percent higher than prior estimates—enough to double the climate impact of natural gas.

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The race to reduce emissions: Five takeaways from OGCI venture day

The day before the World Gas Conference – one of the energy industry’s largest – 10 companies competed for USD $20 million to fund solutions with the power to disrupt how methane is managed, measured, and reduced.

The money was provided by Oil and Gas Climate Investments, the billion-dollar investment fund tied to the Oil and Gas Climate Initiative (OGCI) – a consortium of 10 oil and gas companies sharing knowledge and resources to cut the greenhouse gas footprint of their industry.

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4 Takeaways from the 2018 World Gas Conference

For years, conversations at major oil and gas industry conferences focused on one thing: the shale revolution. Excitement about the surge in economical new supply of unconventionally produced oil and gas was palpable, as panelists spoke of the potential for shale to transform everything from the geopolitics of American energy supply to the price of hydrocarbons. With such an unexpected and seismic change, a supply side story carried the day, with a focus on “below ground” drivers of energy abundance.

But today, the shale revolution is simply the new normal and the conversation has changed. “Above ground” factors like increasing competition from renewables, greenhouse gas emissions, and license to operate will affect demand for natural gas for years. How industry confronts such challenges – both in the United States and internationally – will have a lot to do with industry’s longevity in putting resources to productive use in a changing world demanding cleaner energy

At last week’s World Gas Conference in Washington, DC, difficult questions swirled about whether industry has done enough to earn societal trust that natural gas has a constructive role to play in the transition to a low carbon economy. The biggest buzz of all surrounded one key issue: methane emissions, a core strategic challenge for the oil and gas industry.

I remember from experience that methane began as a niche issue years ago, mentioned by engineering and science teams, not CEOs. World Gas Conference 2018 left no doubt that those days are over, and that tackling methane must become part of business as usual. Here are four key takeaways. Read more

Future ready regulations will catalyze innovation for the oil and gas industry

The oil and gas industry is at an inflection point: according to the International Energy Agency (IEA), the role that natural gas can play in the future of global energy is inextricably linked to its ability to help address environmental problems.

One of these problems is methane emissions–a key focus of the World Gas Conference in Washington, D.C. this week–which represent a reputational risk to the oil and gas industry, a waste of saleable resources, and a contributor to both poor local air quality and climate change.

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