Investors Worth $1.5 Trillion Support White House’s Methane Emissions Reduction Plan
Support Comes as Data show Emissions of the Potent Greenhouse Gas are Rising from the Oil & Gas Sector
Boston, MA, July 01, 2015 /3BL Media/ - As recent data show methane emissions rising from the oil and gas industry, and the White House moves forward with rules to reduce this pollution, leading investors representing $1.5 trillion in assets under management released a statement of support today for a strong federal standard.
“As widely diversified, long-term investors with holdings in the oil and gas industry, we share a vested interest in the industry’s long-term success,” says the statement, which was coordinated by Ceres and Trillium Assets Management. “Consistent with our fiduciary duties, we are concerned that methane emissions pose a serious threat to climate stability, accelerating the rate of warming in the near term and threatening infrastructure and economic harm that will weaken not only the companies we invest in, but the nation as a whole.” For the statement and complete list of signatories, see: www.ceres.org/methanestatement
The White House’s proposal, released in January 2015, would cut methane emissions from the oil and gas industry by 45 percent below 2012-levels by the year 2025. A draft rule is expected this summer.
“As a long-term, global investor, CalPERS knows that climate change poses risks and opportunities,” said Anne Simpson, Senior Portfolio Manager and Director of Global Governance at CalPERS. We need effective regulation to allow markets to price those risks. Methane emissions are potent contributors to global warming so regulation to ensure that companies manage, monitor and ultimately limit these potent emissions is vitally important.”
Methane, the primary component of natural gas, is 25 times more potent as a greenhouse gas than carbon dioxide, over a 100-year period. Methane emissions occur throughout the entire oil and gas system, from production wells to distribution lines. Data released by the Environmental Protection Agency in April show that emissions in 2013 increased three percent over the previous year.
“Direct methane regulations would be good for the climate, the energy sector and the broader economy,” said Jonas D. Kron, Senior Vice President at Trillium Asset Management, LLC. “Evidence indicates that proven technologies that can reduce methane emissions by 40 percent at an average annual cost of less than one cent per thousand cubic feet of produced natural gas - a very cost effective price point. These technologies are commonsense ways to cut emissions and should be a central element of the EPA rules.”
Studies show that methane leaks cost the oil and gas industry nearly $2 billion each year. Capturing and reusing the gas represents a significant economic opportunity.
“Strong methane regulations will not only protect our environment, they will also strengthen oil and gas companies over the long-term and reduce energy costs to Americans,” said New York City Comptroller Scott M. Stringer. “As long-term shareowners of the nation’s oil and gas companies, we have a vested interest in promoting sustainable, industry-wide practices that will create shareowner value for years to come.”
Natural gas production has been steadily rising over the past several years and that trend is expected to continue, driven in part by demand in the electric power industry as it shifts toward cleaner burning fuels.
“It’s vital that we get regulation of methane emissions right, said Andrew Logan, director of Oil and Gas Programs at Ceres. “The EPA’s Clean Power Plan, due out in a month, will drive further adoption of cleaner burning natural gas by electric power providers.”
"I applaud the White House for its commitment to address climate change and improve air quality by introducing cost effective measures to reduce methane gas leaks in the oil and gas industry,” said New York State Comptroller Thomas P. DiNapoli. “Climate change may threaten the New York State economy, as well as the health of New Yorkers, and may negatively affect the returns on investments of the New York State Common Retirement Fund. We will continue to partner with Ceres and other investors to support common sense policies. In addition, we will continue to exercise our rights as shareholders by urging the companies we are invested in to take steps to mitigate climate change, adapt to risks, and take advantage of opportunities in a new clean energy economy."
About Ceres
Ceres is a nonprofit organization mobilizing business and investor leadership on climate change, water scarcity and other sustainability challenges. Ceres directs the Investor Network on Climate Risk (INCR), a network of over 100 institutional investors with collective assets totaling more than $13 trillion. Ceres also directs Business for Innovative Climate & Energy Policy (BICEP), an advocacy coalition of 34 businesses committed to working with policy makers to pass meaningful energy and climate legislation. For more information, visit http://www.ceres.org or follow on Twitter @CeresNews
