Leading oil and gas companies are failing to adequately disclose meaningful information on emissions of methane, according to a new report by the Environmental Defense Fund.
The report, Rising Risk: Improving Methane Disclosure in the Oil and Gas Sector, examines the current state of voluntary reporting on methane in the US oil and gas sector. The report found that none of the 65 market leaders reviewed in the production and midstream segments disclose targets to reduce methane emissions and less than a third report such emissions via accessible, investor-facing data sources. The data, which is publicly disclosed through sources like CDP questionnaires, corporate sustainability/CSR reports and 10-K filings, is generally low quality and lacks rigorous and standardized metrics, making comparisons among operators difficult, EDF says.
The report provides a number of recommendations to improve methane disclosure centered around four key methane metrics that aim to bring a level of standardization and quantitative rigor to methane reporting. Operator and disclosure platform adoption of these metrics will help give investors much-needed information to properly assess risk from methane.
The oil and gas industry releases seven million tons of methane annually in the United States alone, according to the EPA. Methane emissions from the oil and gas sector are increasingly viewed as a financially material issue for companies, and by extension, their investors. A 2015 study by the Rhodium Group found that the sector loses $30 billion globally each year from leaked or vented methane at oil and gas facilities.
The massive methane leak currently under way at the Aliso Canyon storage facility in California, for example, has cost $50 million for mitigation of environmental and community impacts, over $12 million in lost product to date and reputational damage.
Photo credit: oil well via Shutterstock
