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September 22, 2015

Investors Call for Support of EPA Methane Regulations
    by Robert Kropp

A coalition of investors organized by the Interfaith Center on Corporate Responsibility writes to 32 energy companies, requesting that they support new regulations on methane emissions. -- Even before the Environmental Protection Agency (EPA) issued proposed regulatory standards for methane emissions from the oil and gas sector, sustainable investors coordinated by Ceres and Trillium Asset Management issued a statement in support of the Obama administration's action.

“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,” the coalition of investors representing $1.5 trillion in assets under management stated.

“Company-by-company engagement cannot fully address the issue,” the statement continued. “What is truly needed is a strong federal standard on methane that will level the playing field for all companies.”

Now, a second coalition of sustainable investors—this one organized by the
Interfaith Center on Corporate Responsibility (ICCR)—has written to 32 companies in the energy sector, calling on them to “engage constructively in the ongoing national methane rulemaking processes.”

Specifically, the investors have requested that the companies share data and experience with methane monitoring and management, and provide a specific and solutions-oriented perspective on how methane rules can be designed to drive substantial emission reductions in a cost-effective manner.

Perhaps anticipating legal challenges to the proposed standards by the US Chamber of Commerce and other groups, the investors also asked that the companies “work within your trade associations to ensure their support of a fair, honest and transparent process in the promulgation of the methane rules.”

As Joe Romm of Think Progress recently wrote, ““Methane is 34 times stronger a heat-trapping gas than CO2 over a 100-year time scale.” And as the investors pointed out in their letter, over the short term the destructive effects of methane are even greater, “with an impact on global temperature roughly 84 times that of carbon dioxide over a 20-year period.”

“Stronger rules are needed to reduce methane emissions and mitigate climate change impacts,” Danielle Fugere of As You Sow said. “Climate change represents serious and increasing risks for the energy sector, and more broadly, society--climate instability threatens business infrastructure, resource availability, supply chain efficiency, and the ability to produce and distribute goods and services.”

The proposed standards are expected to be finalized in 2016, after a 60-day comment period. Also, the Bureau of Land Management (BLM) reportedly plans to issue regulations governing methane emissions from mining operations on public lands.

“The health, environmental, and economic impacts of methane and associated air emissions are substantial, and there are many cost-effective technologies and services available to business to reduce methane emissions,” Christina Herman of ICCR said. “Businesses that implement GHG (greenhouse gas) emissions reduction plans proactively will be ahead of the game as these and more inevitable regulations are approved.”

In stating that “strong rules are necessary to effectively reduce methane emissions,” the investor letter points out that fewer than 30 of the more than 6,000 domestic oil and gas producers are participants in the EPA’s Natural Gas Star program. The voluntary initiative, which encourages oil and gas companies to improve operational efficiency and reduce methane emissions, has been in operation since 1993.

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