Investors called on oil and gas industry officials to oppose changes proposed Thursday by the U.S. Environmental Protection Agency that would ease the regulatory burden on the oil and gas industry to control methane.
EPA officials said in a release that the changes would remove regulatory duplication and reduce compliance costs each year while maintaining "appropriate" health and environmental regulations.
The EPA is also questioning whether it has the authority to regulate methane until it can be classified as a pollutant covered by the Clean Air Act. The agency will take public comments for 60 days on the proposed changes.
A group of 140 global Investors with a collective $5.5 trillion in assets under management said in a statement that it has called on 35 oil and gas producers and mid-stream companies to oppose the proposed rollbacks and to publicly support continued federal regulation of methane emissions. Those standards, in place since 2016, "are critical to the long-term viability of the oil and gas sector and the energy transition already underway," said a statement organized by the Interfaith Center on Corporate Responsibility.
"Given the potency of methane as a climate forcer, investors believe any weakening of current regulations presents grave threats not only to the planet, but to the future of the natural gas industry, and hence, their portfolios," the group said.
The investors' group credited large producers including Shell, BP, Exxon and Equinor for publicly endorsing current federal methane regulations and reducing their own emissions, but said that industry performance on emissions reduction is mixed, with more than 60% of the industry having no quantitative methane target.
"Many companies have remained silent on the regulatory rollback, and in doing so tacitly support the American Petroleum Institute's position, which is at odds with science and deepens the risks to the industry's license to operate," said Christina Cobourn Herman, ICCR's program director for climate and the environment. "We are indeed gratified to see responsible oil and gas companies recognize the importance of addressing this significant problem, but clearly more industry voices are needed to help make the business case."
Andrew Logan, senior director of oil and gas at Ceres, called it a "put up or shut up" moment for oil and gas companies.
"Given the level of investor scrutiny on this issue, it won't be possible for companies to hide behind the API any longer. In the wake of this proposed rollback, you can expect investors to demand these companies decide, once and for all, where they stand," Mr. Logan of Ceres said in a statement. He noted that while methane is a highly harmful greenhouse gas with 80 times the heating-trapping power of carbon dioxide, it is also a valuable product for oil and gas companies and their investors, who see methane leaks as a waste of assets.
The change was prompted by a White House executive order to federal agencies to review existing regulations that potentially burden development or use of domestically produced energy resources. The proposal would reverse New Source Performance Standards that were put in place during the Obama administration requiring oil and gas operations to install controls to curb the release of methane at all stages, from the well and pipeline to processing and storage facilities.