Energy Exchange

A zero flaring policy is long overdue, and investors can help make it reality

As investors take a hard look at the U.S. energy sector during this time of volatility, natural gas flaring is one of the most important and immediate risks to manage.

The eyesore of the oilfield, flaring natural gas destroys shareholder value and creates environmental, social and governance risk — exactly the kind of problem that an increasing number of asset managers, investment banks, and even private equity firms have promised to address.

Routine flaring is damaging the environment in several ways. In addition to the CO2 emissions from combusted gas, flares can release significant amounts of methane into the atmosphere. EDF’s recent helicopter survey found that more than one in every 10 flares at oil and gas sites across the Permian Basin was either unlit — venting uncombusted methane straight to the atmosphere — or only partially burning the gas they were releasing. In fact, the survey suggests that flaring could be among the region’s largest sources of fugitive methane and a troublesome contributor to local air pollution.

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Posted in Air Quality, Climate, Methane, Natural Gas, New Mexico, PermianMAP, Texas / Comments are closed

A bright future for continuous methane detection

Over the last decade, a trove of scientific studies has established that not only are methane emissions from oil and gas operations a major contributor to climate change, but also that they are severely underestimated and underreported.

EDF has been at the forefront of research to detect and quantify the magnitude of oil and gas methane emissions. And we’ve also helped develop solutions that make large-scale emission reductions easier, faster and cheaper. A new initiative led by The University of Texas at Austin called Project ASTRA is a promising, multi-year experiment with the potential to build on and complement other efforts aimed at scaling global reductions of oil and gas methane emissions.

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Posted in Methane, PermianMAP / Comments are closed

CalSTRS says climate is major portfolio threat, companies must walk the walk on net-zero

A few weeks ago, EDF’s Ben Ratner spoke extensively with Brian Rice, a portfolio manager at California State Teachers’ Retirement Systems about key issues in environmental social and governance investing.

CalSTRS is the largest educator-only pension fund in the world with roughly $243 billion in managed assets. EDF has been working closely with the firm on corporate engagement for more than five years.

This is the first of a two-part Q&A series with CalSTRS examining prospects on ESG and climate investing through the energy transition. This portion of the discussion explores the rise of ESG, the importance of policy, and what comes next for companies with net-zero commitments.

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Posted in California, Climate, Methane, Methane regulatons, Natural Gas / Comments are closed

Now more than ever, it’s time for strong EU standards on methane emissions

As European Union leaders begin the transition from COVID-19 rescue to economic recovery, the need to build back better is taking center stage. Already, national governments representing over 65% of the EU’s population have insisted that leaders stick with the European Green Deal. Their resolve underscores the importance of leadership, resilience and science-based decision making in the face of the gravest health emergency of our time.

These national governments know that the EGD will help usher in a thriving, sustainable European economy that creates good jobs for working people. And they understand the tragic lesson of the COVID-19 crisis: that all nations must heed scientific warnings about public health and security. The scientific community’s clarion call on climate change, and the role of methane pollution in driving near-term warning, should be at the top of the agenda.

For the oil and gas industry, this means that a key component of the post-COVID recovery is the establishment of stringent standards to certify very low methane emissions for all gas used in the EU. Without such standards, the case for “cleaner-burning” natural gas evaporates; over the first 20 years, methane is 80 times more potent than CO2 in driving planetary warming. That’s why the European Commission’s forthcoming methane proposal presents a window that energy companies must take — and an ESG opportunity that investors cannot afford to ignore.

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Posted in Air Quality, Climate, Europe, Methane, Methane regulatons, Natural Gas / Comments are closed

The defining decade for oil and gas in the energy transition

Business as usual for the oil and gas industry is over. Investor confidence is flagging just as the talent pool shrinks and competition from cleaner energy sources intensifies. Pressure on companies to respond to the climate crisis to maintain their future viability has never been higher.

BP’s recent “net-zero” announcement is a case in point. And though time will tell whether BP delivers on its ambition, CEO Bernard Looney deserves credit for putting his company on the right path. It’s critically important — for the planet and the entire industry — that other energy companies meet or beat the mark of BP’s ambition, and that all turn their sights next to implementation.

As BP’s new plan changes the conversation in boardrooms around the world, energy companies that are serious about performing while transforming will need to step up in four areas. Here’s what to watch for as industry’s defining decade begins.

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Posted in Methane, Methane regulatons / Comments are closed

The next major ESG opportunity for investors in Europe

In recent years, institutional investors have demonstrated their formidable influence, as companies respond to investor environmental, social and governance demands and governments take note of forceful investor calls to action. Europe’s leading investors have been especially active, stepping to the vanguard to address the climate crisis with a sense of urgency and injection of ambition.

As Europe pursues its bold “Green Deal,” European investors have a powerful chance to help address a climate blind spot and policy vacuum to ensure worthy climate goals are not derailed. Investors can do so in a way that generates shareholder value while mitigating one of the largest near-term sources of climate risk. The opportunity lies in addressing methane emissions from the global oil and gas industry, which emits more than 75 million metric tons of the greenhouse gas every year.

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Posted in Europe, Methane, Methane regulatons, Natural Gas / Comments are closed