A coalition of investors with more than $300 billion in assets asked the Environmental Protection Agency in an Oct. 9 letter to develop “robust” methane emissions regulations for the oil and gas industry.
National standards will build investor confidence that natural gas is appropriately regulated and will prevent methane emissions that contribute to climate change, the letter to EPA Administrator Gina McCarthy said. Voluntary methane emissions reduction measures are helpful but insufficient due to the diverse nature of the oil and gas sector, the investors said.
“Taking rigorous action on methane now is a major opportunity for the EPA, and a key element of a comprehensive US climate and clean energy policy,” the coalition wrote. “As leading investors, we see important economic and environmental benefits coming from robust regulations.”
EPA Administrator Gina McCarthy has said the agency plans to issue its methane strategy, which could include plans for potential regulations, sometime this fall .
Methane has an impact on climate change more than 20 times greater than carbon dioxide over a 100-year period and accounted for approximately 9 percent of greenhouse gas emissions from human activities in 2012, according to the EPA.
Voluntary Actions ‘Insufficient'
The coalition said voluntary actions undertaken by industry members to curb methane emissions are “meaningful steps in the right direction” but ultimately “insufficient to address the magnitude and urgency of the problem.”
“Uniform rules are the only way to level the playing field and ensure high performance across the board.”
“With thousands of industry operators in the upstream segment alone, uniform rules are the only way to level the playing field and ensure high performance across the board,” the coalition wrote. “As the industry is highly dispersed, a national framework, in collaboration with states, is the right approach to ensure simplicity, consistency and certainty.”
Reducing methane emissions would reduce risks and create value for investors in the oil and gas industry, according to the coalition. By mitigating the impacts of climate change through reductions in methane emissions, economic costs from droughts, storms, floods and other disruptions also would be reduced.
Cheap, Effective Options Available
The coalition argues “proven, cost-effective” technologies to reduce emissions already exist to “slash oil and gas methane emissions by 40 percent at an average annual cost of less than one cent per thousand cubic feet of produced natural gas.”
Industry groups have argued significant progress has been made through voluntary programs to reduce methane emissions, while a coalition of leading environmental groups in September urged the EPA to regulate methane under Section 111 of the Clean Air Act.
Signatories of the letter to McCarthy include New York City Comptroller Scott Stringer, Trillium Asset Management LLC, F&C Investments, Pax World Management LLC, Portfolio 21, Arjuna Capital, the Christopher Reynolds Foundation, First Affirmative Financial Network, Calvert Investment Management Inc., Friends Fiduciary Corp., Nathan Cummings Foundation, Domini Social Investments LLC, Mercy Investment Services Inc., Daughters of Charity, Province of St Louise and Mercy Health.
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A copy of the Oct. 9 letter from the investor coalition to Gina McCarthy is available at http://op.bna.com/env.nsf/r?Open=aada-9pqlbr.