Quaker investors urge EPA to advance strong methane emissions rules
While socially-responsible investing has gained considerable currency in recent years, investing consistent with the Quaker values of integrity, community and care for creation is what the Friends Fiduciary Corporation, headquartered in Philadelphia, has done for many, many years. We invest on behalf of Quaker meetings, schools, churches, and other organizations in Pennsylvania and across the country.
As investors, we see climate change as an existential threat to our portfolio and a growing number of institutional investors agree with us. For this reason, we are vocal proponents of the Environmental Protection Agency’s (EPA) draft rule to cut emissions of methane, a potent greenhouse gas, from the oil and gas sector. In fact, we are urging the agency to further strengthen its rule to maximize the benefits for public health and the environment. We echoed our position at recent virtual public hearings that saw overwhelming support for a more protective rule.
EPA has committed to issuing a supplemental proposal next year to fully address issues like emissions from smaller, leak-prone wells and deliver a final rule that delivers comprehensive protection to communities and the climate.
Specifically, we see an urgent need to strengthen the monitoring requirement in the rule. Hundreds of thousands of smaller, high polluting wells require regular monitoring because even though they produce very little natural gas, they are large and disproportionate emitters of methane.
While EPA has recognized that exempting wells from pollution inspections just because they’re low-producing is not appropriate, under the current proposal, operators that estimate their wells emit less than 3 tons per year of methane annually could still escape regular leak monitoring.
This is a big problem because operators wouldn’t be required to factor in high-emitting operations or equipment failures, allowing many smaller, leak-prone wells to likely escape detection. Smaller, leak-prone wells are responsible for roughly half of Pennsylvania’s 1.1 million-ton methane problem. And because Gov. Tom Wolf’s proposed rule to address oil and gas emissions entirely exempts these wells, it’s critical that the EPA establish a strong federal baseline to protect communities here and across the country.
In addition to the significant public health benefits of reducing methane emissions, there is also a compelling business case for stronger methane regulation. Lost methane is lost product that companies could be selling — which means it is lost profit. The International Energy Agency estimates that oil and gas companies can reduce a third of methane emissions at no net cost, even at today’s low prices.
Over the past several years, we and other investors have engaged with oil and gas companies to make the case for voluntary methane mitigation. Leading companies recognize the business case and have taken measures to reduce emissions, but companies that don’t enact best practices risk the industry’s social license to operate in communities across the country. That’s just one reason why investors representing over $5 trillion in assets — alongside an array of oil and gas companies — support commonsense federal methane regulations.
The urgency of the climate crisis calls for strong regulation which will help preserve the environment and protect public health in communities across the country. It’s incumbent on EPA to finalize an improved rule that addresses all significant sources of pollution.
Jeffery Perkins, executive director, Friends Fiduciary Corporation, Philadelphia