Range Resources shareholders demand review of methane emissions

A church pension fund led the effort

Jon Hurdle

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Jon is an experienced journalist who has covered a wide range of general and business-news stories for national and local media in the U.S. and his native U.K. As a former Reuters reporter, he spent several years covering the early stages of Pennsylvania’s natural gas fracking boom and was one of the first national reporters to write about the effects of gas development on rural communities. Jon trained as a general news reporter with a British newspaper chain and later worked for several business-news organizations including Bloomberg News and Market News International, covering topics including economics, bonds, currencies and monetary policy. Since 2011, he has been a freelance writer, contributing Philadelphia-area news to The New York Times; covering economics for Market News, and writing stories on the environment and other subjects for a number of local outlets including StateImpact. He has written two travel guidebooks to the European Alps; lived in Australia, Switzerland, Israel, and Saudi Arabia, and visited many countries including Ethiopia, Peru, Taiwan, and New Zealand. Outside of work hours, Jon can be found running, birding, cooking, and, when weather permits, gardening in the back yard of a Philadelphia row home where he lives with his partner, Kate.

$This July 27, 2011 file photo shows a farmhouse in the background framed by pipes connecting pumps where the hydraulic fracturing process in the Marcellus Shale was underway at a site in Claysville, Pa.$

Keith Srakocic / AP Photo

This July 27, 2011 file photo shows a farmhouse in the background framed by pipes connecting pumps where the hydraulic fracturing process in the Marcellus Shale was underway at a site in Claysville, Pa.

May 18, 2018 | 2:54 PM

Updated: 2018-05-20 18:04:39

Joe Ulrich / WITF

Methane leaks throughout the entire process of developing natural gas– from well sites, to storage and processing facilities and pipelines.

Shareholders at the natural gas driller Range Resources narrowly approved a resolution this week calling on the company to review its policy on cutting methane emissions in a vote that advocates say is the first to succeed on the methane issue at an energy company that operates in Pennsylvania.

Like other shareholder resolutions, the vote was nonbinding, but may signal growing public pressure on the state’s natural gas industry to curb leaks of the greenhouse gas that is many times more potent than carbon dioxide in contributing to climate change.

According to the Interfaith Center on Climate Responsibility, which promotes shareholder advocacy on environmental and other issues, the resolution is the first of its kind to succeed at a Pennsylvania energy company, and only the second to be passed nationwide. The first was brought by a pension fund for California teachers at WPX Energy of Oklahoma in 2016, according to the center.

The report, due by September, should include the leakage rate as a percentage of production; reduction targets and means to track them, and the environmental impact of methane leaks, the resolution said.

According to the U.S. Environmental Protection Agency, natural gas production contributes more than half of methane produced by the oil and gas sector as a whole.

Because of the potency of methane as a greenhouse gas, it has the potential to offset the climate benefits of natural gas, which burns with much lower carbon dioxide emissions than coal or oil, and so could damage natural gas’s reputation as a relatively clean burning fuel, the resolution said.

It argued that shareholder value would be enhanced by a strong emissions-reduction program which would maximize the amount of gas for sale, support market share, and preserve the environmental reputation of natural gas, as claimed by the industry.
And it accused Range of failing to provide adequate disclosure of its methane-reduction policies.

Range said it plans to meet with the activist shareholders to discuss the resolution.

“Range appreciates the perspective brought forward by the proposal creators, and looks forward to working together with them to further articulate the company’s approach to emissions management,” the company said in a statement.

Spokesman Mike Mackin did not respond to questions on whether Range will take specific actions to comply with the resolution; whether it had adequately disclosed its methane-reduction policies, or what it means by further articulating its approach to emissions management.

But he noted that Range improved its rank among energy companies last year in an annual scorecard on methane emissions produced by As You Sow, a nonprofit that uses shareholder advocacy to promote environmental and social responsibility.

Texas-based Range, one of the earliest operators in the southwestern portion of Pennsylvania’s Marcellus Shale, ranked seventh out of 28 energy companies for making “substantial” reductions in methane emissions, according to the report from As You Sow.

Pennsylvania’s policy to reduce methane emissions from the natural gas industry, announced in January 2016, requires operators of unconventional wells to install the best available technology to stop leaks. The policy also created a revised permit for operators of compressor stations and processing plants.

DEP is finalizing the permits, which are the first in the state to set individual methane limits for new natural gas well sites and compressor stations. But there are no overall targets for emission cuts because that will depend on the number of new facilities, the amount of gas they produce, and the type of equipment they use, said DEP spokesman Neil Shader. He said the permits will be ready “shortly.”

Unconventional natural gas wells in Pennsylvania produced 112,000 tons of methane in 2015, the most recent year for which data is available, up from 108,000 tons the year before, according to the Department of Environmental Protection.

But the nonprofit Environmental Defense Fund, which monitors corporate disclosure of methane emissions, said in a report in February this year that Pennsylvania’s emissions from the natural gas industry are about five times higher than the state’s estimate. The approximately 70,000 conventional wells, which are drilled into shallow formations, leak about 23 percent of their gas compared with just 0.3 percent for deeper unconventional wells, the report said.

Sean Wright, a senior manager at EDF, said the Range Resources resolution shows that shareholders are increasingly concerned about methane emissions. Four years ago, a similar resolution was supported by less than 10 percent of shareholders, compared with around half this time.

Wright said this may be the first time that shareholders of a Pennsylvania energy company have approved a resolution calling for methane reduction, and said it signals that more investors are becoming aware that their shares are at risk from methane emissions.

“Investors see that there’s a very large competitive risk in the natural gas industry,” he said. “Methane undermines the reputation of natural gas as being a cleaner fossil fuel, and in a world of growing cheap renewables, methane makes it harder for natural gas to succeed.”

Rob Altenburg, director of the energy center at the environmental group PennFuture, said demands for information on methane emissions make sense for shareholders because added carbon pollution brings added risk.

“As potential investors seek to divest away from carbon-intensive stocks, and as jurisdictions either move to price carbon or transition away from polluting industry, the value of these stocks could fall,” he said.