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Methane Regulations Make Good Business Sense
By Michael Schweibinz

Methane emissions are frequently left out of the conversation about measuring and mitigating the effects of climate change. While methane only accounted for 9% of green house gas emissions in 2012, the long-term impacts this gas has on the environment are alarming!

Methane, the primary component of natural gas, effects climate change more than “20 times greater than carbon dioxide over a 100-year period.” But given the fact that it constitutes less than 10% percent of greenhouse gas emissions globally, there has unfortunately been far less attention focused on regulating this gas.

Given the various risks associated with methane emissions, investors have taken action hoping to expedite the implementation of new regulation. A coalition of investors—including First Affirmative—responsible for over $300 billion in investment assets has written to the EPA asking the agency to develop “robust methane emission regulations for the oil and gas industry.”

The coalition claimes that “taking rigorous action on methane now is a major opportunity for the EPA, and a key element of a comprehensive U.S. climate and clean energy policy.” These investors believe that industry-wide regulation will greatly reduce overall methane emissions, which will, in turn, reduce the economic costs associated with extreme weather events.

Some companies are voluntarily measuring their methane emissions, which is clearly a step in the right direction. However, the lack of universal standards and measurements leads to an insufficient solution to a most urgent problem. “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.” And considering the business is highly dispersed, “a national framework, in collaboration with states, is the right approach to ensure simplicity, consistency, and certainty.”

The coalition acknowledges that costs are a major concern, and proposes an economical solution. In their letter to the EPA, the investors argue that there are currently “proven, cost effective technologies” that would “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.” In other words, the cost of regulation today is immaterial in comparison to the inherent future costs associated with more severe climate change—precisely why shrewd investors from around the world are endorsing this action.

 

At First Affirmative, we understand that the ways we save, spend, and invest can dramatically influence both the fabric and consciousness of society. We believe that in addition to the benefits of ownership, investors bear responsibility for the impact our money has in the world. Are you making conscious decisions about the impact of your consumer purchase and investment decisions?

 

Posted: October 26, 2014