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June 15, 2012
Investors Call for Improved Management of Methane Emissions from Fracking
    by Robert Kropp

An international coalition of institutional investment organizations with more than $20 trillion in assets warn of the impacts of methane emissions on global warming, and issue a draft framework for improved corporate disclosure.

In April, following a 100-day comment period that drew 150,000 responses from interested parties, the Environmental Protection Agency (EPA) issued regulations designed to reduce dangerous air pollutants such as methane in the hydraulic fracturing, or fracking, process.

Starting in 2015, all new wells must employ the green completions technology, which captures methane and other pollutants that escape from wells in the first few days after they are drilled. EPA estimates that the regulations will lead to a decrease in emissions of methane and other pollutants—including the cancer-causing benzene and hexane—of 95%.

Environmental activists have argued, however, that EPA's regulations leave "literally millions of tons of pollution from this industry uncontrolled, still harming communities and our planet," according to the Natural Resources Defense Council (NRDC).

This week, an international coalition of institutional investment organizations with assets under management in excess of $20 trillion called on companies and governments to minimize methane emitted in the fracking process. In a s tatement, the coalition—consisting of the Investor Network on Climate Risk (INCR), the Institutional Investors Group on Climate Change (IIGCC), and the Investor Group on Climate Change (IGCC)—called for "effective steps to minimize methane emissions by the oil and gas sector," as well as "effective regulations…to minimize fugitive methane emissions."

Last year, the same coalition called for effective climate change policies to provide long-term certainty in order that appropriate incentives for private investment exist. "Our action on methane in the oil and gas sector accords with" that action, the coalition stated.

Methane, the coalition points out, "is more than twenty times more potent than carbon dioxide and accounts for 14% of global greenhouse gas emissions." Furthermore, methane emissions are projected to grow by as much as 35% globally by 2020, largely because of expanded hydraulic fracturing. Considering the substantial short-term effects of methane on global warming, the transition from reliance on coal to natural gas is not without considerable risks.

"Methane emissions can be managed effectively with technologies and strategies that are available today," Mindy Lubber, president of Ceres and director of INCR, said. Therefore companies in the oil and gas sector should ensure that their policies and practices "include requirements to implement best practice methane monitoring and control technology for new wells and gas infrastructure," according to the statement.

In order to help companies in the oil and gas sector improve upon currently insufficient corporate disclosures on the management of methane emissions, the coalition has prepared a draft disclosure framework, and invites comments and recommendations.


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