Event Highlights How Environmental Progress Is Being Prioritized by Oil and Gas Industry
According to last week’s panel discussion at the Bipartisan Policy Center, the oil and natural gas industry is here to stay, and is looking greener than ever – despite the constant narrative peddled by anti-fracking activists. The event, called “Environmental Progress in the Oil and Gas Industry: What’s Next?”, explored the ever-growing role of Environmental Social Governance (ESG) in the energy sector, specifically as shareholder resolutions surrounding climate change continue to dominate the media and boardrooms across the industry.
ESG is a set of standards for a company’s operations that socially conscious investors use to screen potential investments. Eighty-four percent of millennials cite ESG as an important consideration in their investment decisions for companies across all industries.
Not surprisingly, the oil and gas industry is well positioned to address these environmental concerns. The panelists, representing both upstream and downstream companies, agreed that addressing ESG concerns, such as emissions and water management, were not only economical, but the “right thing to do.”
Alanna Fishman, Director of Policy and Social Responsibility at HBW Resources, summed up ESG’s role in the oil and gas industry gas:
“ESG is a long-term investment on performance approach. Companies might take particular renewable projects into their profile. In the end, oil and gas remain a fundamental part of portfolio diversification. The opportunity for oil and gas is really to embrace that best in class approach of really managing the risk from a wholistic perspective. Oil and gas aren’t going to go anywhere. We have this for the foreseeable future so we are doing what we can to operate in the space in a way that’s sustainable on a long-term basis.”
Donald Chahbazpour, Director of Climate Change Compliance at National Grid, highlighted two industry initiatives promoting the sustainable development of natural gas. The Natural Gas Supply collaborative (NGSC) is a voluntary partnership of natural gas purchasers, including some of the largest utilities, dedicated to promoting safe and responsible practices for the natural gas supply chain. As buyers of the commodity, they are “developing non-financial criteria to promote the safe and responsible development of natural gas.” According to Chahbazpour, the collaborative evaluates potential purchases based on methane emissions, air quality, community impacts, safety, and water management.
In addition, Chahbazpour highlighted One Future, a group of natural gas companies working together to voluntarily reduce methane emissions across the natural gas supply chain. One Future is an EPA Methane Challenge-endorsed program. Members of the coalition operate in 11 of the 19 production basins.
“With operations across the entire value chain, [the coalition is] committed to having an emissions, or leak rate, of 1 percent or less from wellhead to burner tip by 2025,” Chahbazpour explained.
EPA and Global Carbon Project data show that U.S. oil and natural gas system methane emissions currently account for just 1.4 percent of overall global methane emissions.
Chahbazpour championed the energy potential of natural gas saying, “gas systems on a peak day in the winter delivers multiples of the amount of energy that an electrical system can produce on a peak day in the summer. And it does so much cheaper.”
The NGSG and One Future aren’t the only voluntary coalitions in the industry dedicated to environmental responsibility. John Williams, Director of Health Safety and Environment Affairs at Apache, discussed The Environmental Partnership, a collaboration of companies in the oil and natural gas industry “committed to continuously improve the industry’s environmental performance.”
According to Williams, the partnership is currently focusing on developing technologies to decrease emissions. “It’s challenging all members of the industry to step their game up,” he remarked. Williams estimated that close to one-third of gas production in the U.S. is currently represented within the partnership.
It’s clear that the oil and gas industry takes environmental responsibility seriously and is dedicated to ESG, without burdensome government regulation. This panel discussion is just the most recent evidence that investing in fossil fuels and addressing environmental concerns is not an either-or proposition.