Methane Emissions Vary Widely Among Top US Producers

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The top 100 US gas and oil producers accounted for almost 80% of the country’s methane and greenhouse gas (GHG) emissions reported in 2019, according to findings by Ceres and the Clean Air Task Force. But the report, Benchmarking Methane and other GHG Emissions of Oil and Natural Gas Production in the United States, shows a wide disparity between many small and large operators on emissions intensity, or the amount of methane or GHG emissions per unit of production. The findings underscore the outsized impact private operators have on the overall emissions picture (see graphs). Companies like Hilcorp, Terra Energy and Flywheel Energy all rank among the top 10 highest emitters but have managed to avoid the same level of public and investor scrutiny that is being directed at their larger peers. The data, covering some 295 public and private producers, is culled from information companies are required to submit to the US Environmental Protection Agency (EPA). “Our report clearly shows that one oil and gas company is not the same as another when it comes to production emissions,” said Andrew Logan, senior director of oil and gas at Ceres. “The oil and gas companies that minimize and most effectively manage their emissions will be best positioned to survive the transition to a net-zero emissions future.” The authors intended to create a consistent record for comparison to inform attempts by investors to pressure companies to rein in emissions. It can be difficult to decipher and compare the voluntarily reported emissions data, since metrics can be inconsistent and often vary by operator. Moreover, emissions sources can vary by basin. In the US' gassiest play, the Appalachian Basin, 41 companies reported emissions and production data to EPA. Methane represented almost 80% of the total GHG emissions there. Among the report's key findings: • While the 195 smallest producers included in the report collectively account for just 9% of production, they are responsible for 22% of total reported emissions. • Emissions intensity varies widely between even similarly sized operators. • Hydrocarbon production and associated GHG emissions are concentrated in a small number of basins. In 2019, the five largest basins by total oil and gas production accounted for 66% of total reported natural gas production; 80% of total reported oil production; 51% of total reported methane emissions and 78% of total reported carbon dioxide emissions. • The sheer scale of production at major oil and gas companies means their GHG emissions add up, with the top 11 US producers accounting for a quarter of total reported GHG emissions. Even among these 11 companies, emissions vary substantially -- the highest emitter’s total GHG emissions are 14 times greater than the lowest emitter. • But the scale of the US’ largest producers keeps their intensity rankings significantly lower than their small, private rivals. The report comes as newly emboldened investors and activists are finding success in their pressure campaigns against large US producers who they say have not done enough to prepare for the energy transition. Last week, Chevron shareholders formally requested that the California supermajor start planning to reduce Scope 3 emissions from the use of its products (NGW May31'21). On the same day, Exxon Mobil saw its board overhauled with the eventual election of three new directors nominated by an activist investor trying to prod the Texas giant into a transition-focused strategy. Those moves added to the urgency for two of the largest US gas producers to shift gears after previously getting away with setting only short-term targets for operational-emissions reductions or aspirational long-term emissions targets. Until now, shareholders have had limited resources for comparing companies' emissions profiles. The findings by Ceres and the Clean Air Task Force will help investors hold these companies to account by setting benchmarks for where they are now compared to where they need to be. The information compiled in the report could position shareholders to drill down on specific targets. “These data provide valuable insights to a range of stakeholders and will continue to improve as technology and reporting frameworks allow us to better account for total emissions,” said Robert LaCount, climate advisory lead for North America at consultancy Environmental Resources Management. Deon Daugherty, Houston 2019 Emissions Reported to

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