Kinder Morgan Methane Emissions 2014
|Company||Kinder Morgan Inc.|
|Filer||Miller/Howard Investments, Inc.|
|Subject(s)||Climate Change; Greenhouse Gas Emissions; Methane Emissions|
|Resolved Clause Summary||Reductions targets for methane emissions and pipeline maintenance|
Over a 20 year period, methane’s impact on temperature is 72 times that of carbon dioxide and therefore contributes significantly to climate change. The oil and gas industry accounts for 70% of energy-related methane emissions.
Academic studies from Cornell, the University of Colorado and the University of Texas, among others, estimate highly varied methane leakage rates as a percentage of production and transportation.
Reducing methane emissions in upstream oil and gas production is one of four policies proposed by the International Energy Agency (IEA) that “could stop the growth in global energy-related emissions by the end of this decade at no net economic cost” and help keep the increase in global mean temperature below 2 degrees Celsius. All four policies “rely only on existing technologies”, “have already been adopted and proven in several countries”, and “would not harm economic growth in any country or region”.
The IEA highlights the risk of failing to implement best practice measurement and disclosure of methane emissions and recommends oil and gas companies undertake a set of actions “necessary to realize the economic and energy security benefits while meeting public concerns” of unconventional gas development. The IEA recommends oil and gas companies eliminate venting and minimize flaring and recommends producers “consider setting targets on emissions as part of their overall strategic policies to win public confidence.”
The IEA states that “public authorities need to consider imposing restrictions on venting and flaring.” A failure by companies to proactively reduce methane emissions may invite more rigorous regulations.
We believe Kinder Morgan has a responsibility to measure and reduce methane emissions; failure to do so threatens the company’s reputation and social license to operate.
Benefits of reducing methane emissions include worker safety improvements, maximizing available energy resources, protecting human health, reducing environmental impacts, and reducing economic waste.
Upgrading oil and gas equipment and infrastructure can also improve performance and reduce downtime. Significant reductions in methane emissions are often possible with positive return on investment.
Kinder Morgan has recently suffered several high profile pipeline spills and leaks as well as concerns from investors about reduced capital spending including on pipeline maintenance. These issues damage Kinder Morgan’s reputation and make it more challenging to secure support from communities and regulators for new projects and expansion plans.
Shareholders request Kinder Morgan issue a report that (1) reviews the company’s policies, actions, and plans to measure, disclose, mitigate, and set reduction targets for methane emissions resulting from all operations under the company’s financial or operational control, and (2) reviews the company’s related policies on pipeline maintenance and construction, including integrity and leak testing, spill prevention, reporting and control of incidents, and emergency response plans. The report should be prepared at reasonable cost, omit proprietary information, and be made available to shareholders by September 2014.