At the End of the Line


It is easy to want to give in to the promise that natural gas has provided us. It is the cleanest burning fossil fuel, it is low cost, and it has played an undeniable role in helping our energy markets move away from dirty coal. These are all great selling points. However, as more utilities transition to gas power and boast about the increasing role it will play in helping them align with the Paris climate goal of maintaining global warming well below 2 degrees Celsius, one begins to suspect that the cited benefits of gas as a “bridge fuel” to a clean energy economy have perhaps resulted in a bridge too far to achieve that urgent goal. The International Energy Agency (IEA) notes that to assure the climate benefits of gas, methane leaks must be controlled.

Methane, which has approximately 86 times the global warming potential of carbon dioxide over a 20-year period, is the main component of natural gas. Emissions of this potent climate forcer occur throughout the oil and gas supply chain. A recent EDF study demonstrated this problem could be 60% worse than previously thought, chipping away at gas’ climate benefit over coal.

The good news is that solutions exist and are being put to use to drive down methane emissions, particularly in the upstream part of the supply chain. Mounting investor pressure has successfully moved oil and gas production companies to incorporate best practices into their methane management strategies. One example is the methane progress Exxon has made in the year since As You Sow’s methane resolution received a nearly 40% vote in 2017.

While most shareholder action on methane up to now has focused on upstream oil and gas production, As You Sow’s The End of the Line report brings overdue attention to companies that distribute natural gas to end users -- individual homes and businesses at the end of the natural gas supply line. Gas can escape from these distribution systems due to broken pipes, leaks, and intentional releases when working on pipelines. Some Local Distribution Companies have begun proactively implementing certain effective best practices for reducing methane emissions, but the fact remains that there is a need for a much greater focus across this sector on reducing emissions from these systems -- from monitoring pipelines efficiently, to replacing leaking pipes quickly, to implementing effective and proactive management practices to reduce intentional and unintentional methane emissions. The End of the Line provides investors with much-needed insight into downstream methane challenges and what utility companies are doing, or should be doing, to address them.

The report outlines the scope of the problem and the business risks involved. It further defines a set of nine benchmarking criteria that demonstrate best management practices, disclosures needed from companies, and examples of companies leading the way. Companies who do not meet such standards are at risk of lagging behind their peers.

By releasing this report, As You Sow hopes to encourage investors and companies to address climate risks found in an often overlooked segment of the natural gas supply chain. Reducing methane emissions across the entire natural gas system presents an urgent challenge that companies must prioritize. Given the rapid nature with which our energy market is transitioning to natural gas, and the urgency of climate change impacts, we must ensure that methane emissions are responsibly mitigated in the near-term. While we appreciate where improvement is being achieved in the move toward natural gas, we cannot afford to ignore gas’ potential limitations. We are at the end of the line in terms of sufficient time to address and mitigate greenhouse gas emissions while maintaining a livable climate. Now is the time to press for true progress.