A report from the Environmental Defense Fund (EDF) has found that the oil and gas industry has seen some improvement after pressure from investors, but are not doing enough to keep up with demands for transparency.
The EDF report studied the voluntary methane leak reporting practices of sixty four major upstream and midstream companies, finding that only four report quantitative methane targets and only nine report ‘comprehensively’ on leak detection and repair programmes. Even though the paper found that there was an incremental improvement in methane reporting, 42% of surveyed companies still had no form of methane leak disclosure.
“Investors are increasingly looking to support leading companies who effectively manage material ESG [environmental, social and corporate governance] issues,” said co-author Sean Wright of EDF+Business in a press release. “Our report shows which companies are becoming more transparent about methane management, and which are not. Investors will take note of this when making decisions.”
Recommendations from the study include reporting on emissions data, leak detection and repair programmes, and stances on regulation and emissions targets.
Of the seven companies who have introduced reporting schemes since the EDF’s initial report on methane leaks two years ago, five of them did so following methane-disclosure shareholder resolutions.
“As a long-term global investor, we recognize that methane emissions are one of the most financially significant environmental risks we face,” Brian Rice, portfolio manager at CalSTRS (California’s second largest public pension fund), said in an EDF press release. “While the oil and gas industry has taken some steps to address this issue, CalSTRS sees opportunities for the industry to enhance its methane risk management and reporting efforts that simultaneously reduce atmospheric emissions and capture more natural gas by phasing out methane-emitting equipment, increasing training and designing new emissions-free systems.”
In a blog post on 5 February, president of XTO Energy (a subsidiary of Exxon Mobil) Sara Ortwein recommended five methods to reduce methane leakage, including the phasing out of high-bleed pneumatic control devices, the introduction of rules promoting leak detection and repair, and the monitoring of manual well unloadings in the field.
According to 2015 a report by the Rhodium Group, methane leaks cost the industry $30 billion a year globally. The leaks also weaken natural gas’ green credentials when compared with dirtier-burning fuels like coal. The International Energy Agency said in a commentary in 2017, that although measures to stop leaks would pay for themselves due to saved product, competition for investment capital within companies and a general lack of awareness when it comes to leaks prevents necessary changes taking place.
Methane is an extremely potent greenhouse gas, although reports on how potent vary, with the US Environmental Protection Agency (EPA) saying that the compound is twenty five times more potent than CO2 when assessed over a century. However, a report in Scientific American found that when assessed over a couple of decades, methane is 86 times as potent. According to the EPA the oil and gas industry is the largest contributor to the US’ methane emissions.