Big investors urge oil companies to tackle methane leaks

This undated handout frame grab taken from video, provided by the Pennsylvania Department of Environmental Protection shows bubbling due to impaired cementing in an unconventional gas well in Pennsylvania. (AP)

Thirty institutional investors managing more than $3 trillion in assets have announced a new initiative to encourage global oil and gas companies, including utilities, to measure, report and reduce methane emissions.

The initiative, coordinated by the Principles for Responsible Investment, a nonprofit supported by the United Nations, is another example of investor concern over the financial and environmental risks of methane leaks.

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Methane is the main ingredient of natural gas and a potent polluter, with more than 80 times the warming power of carbon dioxide. It is a product of oil drilling and often vented or flared as production companies pump oil. The Environmental Defense Fund says methane is responsible for one-quarter of global warming and that the oil and gas industry is among the largest man-made sources of methane.

“Companies tout gas as a clean, low-carbon fuel, ignoring the vast amounts of unburned methane escaping from their systems each year or the lack of transparency with regard to monitoring and reduction strategies,” the EDF recently said in a statement.

The asset managers in PRI’s methane initiative represent a dozen countries across North America, Europe and Asia-Pacific.