Oil and gas companies in the United States are the latest to add their voices to the broad set of stakeholders supporting federal regulation of methane emissions from the oil and natural gas sector. These companies have a major responsibility to reduce methane emissions, a key step in the energy transition. This week in Houston, at CERAWeek, Shell, ExxonMobil and BP took important steps to support nationwide direct methane regulation, with Shell urging the Environmental Protection Agency (EPA) to not deregulate methane emissions and to even tighten standards.
There is more opportunity than ever before to regulate and reduce emissions in ways that work for industry and the environment. As ExxonMobil wrote, federal methane regulation “helps build stakeholder confidence, and provides long-term certainty for industry planning and investment while achieving climate related goals.”
The federal regulation of methane emissions is an essential effort that builds on proven state regulatory models and positive efforts that dozens of companies are already practicing as part of sound business operations.
It’s time for more companies to speak up, because without nationwide methane regulation, industry is only as strong as its weakest link.
Methane has made quite an entrance into climate science in the last few years.
Though long recognized as a potent greenhouse gas – more than 80 times as powerful as carbon dioxide in the short term – its significance in our battle against climate change has only recently been quantified. The oil and gas industry, for example, is among the largest emitters of methane on the planet, and research (including some by EDF scientists) has documented that far more methane seeps out of wells, pipelines, valves and other points in the oil and gas supply chain than energy companies and official emission inventories report.
This post was co-authored by Rosalie Winn, attorney for Environmental Defense Fund.
Methane emissions from the American oil and gas industry waste valuable resources, accelerate climate change and severely cloud the credibility of natural gas in the low carbon transition. Unfortunately, Acting EPA Administrator Andrew Wheeler has proposed to weaken standards limiting pollution from new and modified oil and gas facilities.
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.
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.
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
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.
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.
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.
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.