Arjuna Capital: Berkshire, Dominion Energy and Occidental Proposals on Methane Storage Safety, Emissions and Flaring Nabbed Better than Expected Shareholder Support.
BOSTON///May 18, 2017/// Three times in the last week shareholders at major energy companies voted in double digits for more methane pollution disclosure: 10 percent at Berkshire Hathaway Energy; 24 percent at Dominion Energy; and 33 percent at Occidental Petroleum. Given that two of the three resolutions from Arjuna Capital, in partnership with As You Sow (Dominion) and Baldwin Brothers (Berkshire & Occidental), were first-time proxy ballot measures, this is a very positive outcome. In another (and related) win, the U.S. Securities and Exchange Commission (SEC) explicitly rejected a Dominion proposal to keep the methane measure off the proxy ballot.
The Arjuna Capital/As You Sow-filed resolution at Dominion is available online at: https://arjuna-capital.com/wp-content/uploads/2017/05/Methane-Emissions-Proposal_D-2017.pdf
While utilities like Dominion are increasingly reliant on the reliable and efficient delivery of gas along the value chain, the 2015 failure of a gas injection well at Southern California Gas Company’s Aliso Canyon Storage Field in Los Angeles exposed major vulnerabilities in the maintenance and safety of natural gas storage facilities. The incident revealed a lack of oversight and contingency planning in the face of a well blowout.
Natasha Lamb, managing partner at Arjuna Capital, said: “While our proposals at Berkshire, Dominion and Occidental did not obtain majority votes, we made enormous early progress with shareholders at all three companies on methane, and view this as a successful first step to apply more pressure for more data, greater disclosure and transparency on these issues.”
Lamb continued: “For example, a sizable number of Dominion investors are understandably concerned the company is not managing its methane storage risks. The well blowout at Aliso canyon that released 100,000 tons of methane in LA County exposed the vulnerability of natural gas storage wells drilled decades ago. Such releases are an absolute climate time bomb. Given that Dominion holds the third highest volume of natural gas in the US, managing these risks should be a first-order priority.”
“Methane leaks from gas operations can fully erase the climate benefits of natural gas, making its use worse than coal.” said Danielle Fugere, President of As You Sow, “The risks to Dominion and its shareholders are clear. As the public and regulators increasingly focus on this issue, Dominion must take action.”
Unfortunately, these messages have not yet been internalized by the company. At Dominion Energy’s meeting on May 10, the company staunchly defended its environmental record, and then proceeded to vote down multiple environmental and climate-motivated shareholder resolutions. The Arjuna Capital/As You Sow proposal covered such issues as well integrity, a key issue given the scope of damage from the disastrous blowout in California.
Research indicates methane leaks from gas operations could erase the climate benefits of reducing coal use. Methane emissions are a significant contributor to climate change, with an impact on global temperature roughly 84 times that of CO2 over a 20-year period. By one estimate, leaked methane represented $30 billion dollars of lost revenue (3 percent of gas produced) in 2012. Yet, an October 2016 study published in Nature indicates methane emissions from the oil and gas sector are 20 to 60 percent higher than previously thought.
Arjuna said it would refile its shareholder proposals and that Dominion, in particular, must come to terms with the significant environmental threats posed by methane, especially since public safety, conservation efforts and climate considerations surrounding methane enjoy bipartisan support in Congress.
On May 10, 2017, the U.S. Senate unexpectedly blocked a resolution that would have repealed an Interior Department rule from the Obama Administration that heavily restricts methane emissions from drilling operations on public lands. This rule sets the tone for utilities and treats methane as it should be, as a potent greenhouse gas that must be stopped from getting into the atmosphere.
Arjuna Capital is an investment firm focused on sustainable and impact investing. For more information, visit www.Arjuna-Capital.com.
CONTACT: Patrick Mitchell, (703) 276-3266 or [email protected]