Be prepared: Why the smart oil and gas producers are leaning in despite uncertainty

By Jon Goldstein

Be Prepared. It’s not just the Boy Scout motto, it’s also the way most smart businesses try to operate. Better to anticipate future compliance issues today and bake them into your forward planning, than to be caught flatfooted tomorrow.

That is a big part of the reason major multinational oil and gas producers like ExxonMobil and Shell have said they are already following methane pollution rules finalized by the U.S. Environmental Protection Agency last year. Despite EPA Administrator Scott Pruitt’s best efforts to delay implementation of these rules, the courts have repeatedly ruled in favor of their speedy and complete implementation.

Most recently the DC Circuit last week rejected the latest attempt to undermine methane pollution limits for sources in the oil and gas sector and put those standards into full force and effect. It’s a decision that shows the wisdom of ExxonMobil’s and Shell’s strategy to lean in on regulatory compliance (and highlights the danger for other oil and gas producers that seem to be content dragging their feet and exposing their investors to compliance risk).

A second policy shift last week again underlines the benefits of proper prior preparation from the oil and gas industry. Last Wednesday, the Pruitt EPA withdrew its attempt to extend the deadline for compliance with the new, more protective, health based standard for ground-level ozone, commonly known as smog. This decision came one day after a coalition of 16 state Attorneys General joined a lawsuit challenging the delay (EDF and partners also challenged the delay). This means that EPA will now again have to meet an Oct. 1 deadline for determining which areas of the country fail to meet healthy air standards.

This ozone decision is terrific news for residents of areas that struggle with smog pollution tied to under-regulated oil and gas development. With this decision, EPA and states should now have the impetus to continue working on a more expedited timeline to reduce oil and gas pollution and restore healthy air.

It’s also a workable development for the forward thinking oil and gas companies since compliance with EPA’s methane rules will also help reduce the emissions that lead to the formation of unhealthy smog. By thinking ahead on methane, these producers have also put themselves in a better position to address smog problems.

There is a real danger for the oil and gas industry in this era of federal regulatory uncertainty. By pushing the pendulum so far toward deregulation, the worst actors in oil and gas may find themselves creating the very regulatory confusion they and their investors loathe. But you don’t have to take our word for it, as Kevin Book Managing Partner with ClearView Energy Partners recently told Pamela King of E&E News, “If the Trump administration veers more toward a ‘rip it up’ approach to rulemaking, the implication could be that uncertainty limits future investments.”

A stable regulatory environment, investment certainty and cleaner air. Addressing methane is the smart move for the oil and gas industry no matter how you look at it.

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Methane standards are the law of the land; it’s time to stop litigation and start complying

By Matt Watson

Let me first make this important point: I’ve met and worked with a lot of folks in the oil and gas industry who are truly dedicated to making their operations as safe and clean as possible – people who care about the communities they live and work in and who take pride in the reputation of the companies they work for.

That said, I’ve always rolled my eyes a little when I see companies boast in sustainability reports that they comply with all applicable federal and state laws.  Really?  Not breaking the law is the high bar you’re shooting for?

But , as it turns out, one of the nation’s largest oil and gas trade associations is now saying that not only does it oppose common-sense laws requiring companies to reduce their emissions of methane and other harmful air pollution, it’s casting doubt on the extent to which companies should even comply.

The courts have repeatedly struck down efforts by the Trump administration and industry lobbyists to suspend these pollution standards.  And these rules are now in full legal effect.

Yet, in last week’s Inside EPA/Climate, Lee Fuller of the Independent Petroleum Association of America (IPAA) is quoted saying that the court’s rejection of these efforts makes compliance “an EPA enforcement issue, and we have had no guidance from EPA on the enforcement process that they will undertake.”

There should be no confusion here. Compliance is not an enforcement issue. Compliance is a legal obligation. Any company that refuses to meet that obligation is operating outside of the law, regardless of how EPA decides to approach enforcement.

Cries that companies haven’t had enough time to get ready for these standards also fail to pass the straight-face test.  These rules were issued in June 2016 and gave the industry a full year to start taking basic steps to detect and repair leaks – using cost-effective techniques that were pioneered in the states and which have long been in use by leading oil and gas operators.

In fact, operators were required to conduct their first leak surveys at well sites and compressor stations by June 3, 2017, several days before EPA’s unlawful 90-day suspension of the standards was published. Any company that wasn’t implementing these find-and-fix practices was breaking the law then.  And any company that isn’t complying since the court ruled the suspension illegal is violating the law now.

Some in industry have bemoaned the cost and confusion of “regulatory uncertainty” as the Trump EPA attempts to roll back basic public health and environmental protections and the courts time and time again rule those efforts illegal. Even now, EPA Administrator Scott Pruitt – backed by players who represent industry’s lowest common denominator – is attempting another delay of the methane rules, this time for two years.

If the industry is truly worried about regulatory uncertainty, trade groups and the industry lobby should stop litigating against these vital protections, cease sowing doubt about their legal effect and urge Scott Pruitt to abandon his lawless efforts to undermine them. The chaos they bemoan is entirely of their own making.

It’s worth noting that not everyone in industry is playing that game.  Leaders aren’t throwing up smoke screens and dodging the issue, they’re moving forward.  In fact, both Exxon and Shell confirmed their compliance with the operational requirements of the methane rules even before the 90-day stay had been overturned by the court. That’s the kind of responsible action that’s not only good for communities and the environment, it’s good for business – in terms of both bottom-line and reputation.

As I said at the outset, I know a lot of good people in the oil and gas world – people who don’t like the turn things have taken in D.C. and who know that any short-lived upside will pale against the backlash this industry will face at home and abroad if it’s seen as doing nothing but fighting against the shift to a cleaner, lower-carbon future.

It’s time for leaders in industry to step out from behind the shadows.  If the IPAA’s of the world are allowed to speak for everyone, companies that are trying to do the right thing will be tagged as retrograde thinkers right along with them. Instead of proving that they can evolve, adapt and be part of the solutions demanded by and owed to both their host communities and the planet, they’ll be riding a side-car to obsolescence.

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No one-hit wonder: Walmart reinforces its commitment to safer chemicals

By Boma Brown-West

Walmart made two big moves last week to reinforce its commitment to leadership on safer chemicals. In 2013 Walmart sent a major demand signal for safer chemicals through the supply chain – issuing its Sustainable Chemistry Policy that covered 700 suppliers and over 90,000 cleaning, personal care, and cosmetics products on its shelves. The policy called for greater ingredient transparency and the reduction and elimination of chemicals harmful to human and environmental health, starting with eight prevalent chemicals of concern. Last week, Walmart released its latest results following up on these commitments and became the first retailer to participate in the Chemical Footprint Project annual survey (and the second major retailer to become a CFP signatory).

Walmart’s participation in the Chemical Footprint Project is a new indicator of its continued commitment to safer products

The Chemical Footprint Project is an initiative to benchmark how effectively companies are managing the chemicals in their products and supply chains. As I mentioned in a previous blog, it’s a way for investors and large purchasers to assess which firms are carrying heavy chemical risk and which ones are demonstrating competitive leadership in response to growing demand for safer products. So far, 24 companies, including Walmart, participate in this program – sending a clear signal to their suppliers, investors, and consumers that chemicals management is material to business success. Leaders identified in the CFP survey show that adopting and enforcing policies and measuring progress are key to reducing chemicals of concern.


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Progress on its ground-breaking policy

Also last week, Walmart quietly released its second annual Sustainable Chemistry Policy report, showing progress on its policy to eliminate priority chemicals. The chemicals of concern were drawn from 16 reputable regulatory and other authoritative lists – starting with eight High Priority Chemicals.


A chemical inventory is the first step in meeting a commitment to reduce your chemical footprint

Before jumping into the results, let’s review why this public disclosure of results is important. If you can’t measure something, you can’t improve it effectively. Walmart’s public reporting of quantitative data shows that it is serious about measuring its chemical footprint and being transparent about it. Walmart uses aggregate chemical inventory information across and within the departments under the policy to track progress.

Clear, meaningful metrics to track progress are the next step

Walmart tracks progress by looking at both weight volume – pounds of chemicals going out the door – and ubiquity – number of suppliers using these chemicals and the number of products in which they are using them. Both are important indicators of the prevalence of these chemicals in our world. Last year, Walmart achieved a 95% reduction in its High Priority Chemicals (HPCs) at Walmart US stores, equivalent to 23 million lbs. Since then, another 372,230 lbs have been removed – a 30% drop compared to the 2015 weight volume and a 96% drop since the policy began in 2014. Similar reductions continue to happen at Walmart’s Sam’s Club stores:  another 75,629 lbs have been eliminated, a 53% drop compared to the 2015 weight volume and a 68% drop compared to 2014. The second year results also reaffirm that a concerted effort to reduce a select set of priority chemicals, i.e. HPCs, drives results faster. Overall usage of Walmart Priority Chemicals continues to decrease (at Walmart US stores), but not nearly at the rate of that of Walmart HPCs.

Figure 1: The cumulative weight volume reduction of High Priority Chemicals since 2014 has been over 23.6 million lbs and over 164,000 lbs for Walmart and Sam’s Club respectively.

Walmart’s public disclosure also shows that the company isn’t afraid to share where performance is lagging

Though overall weight volume of the HPCs continues to drop, their ubiquity continues to be a challenge. Both the number of products (i.e. UPCs) containing the HPCs and the number of suppliers using them continues to drop, at both Walmart US and Sam’s Club stores, but at a rate slower than the weight volume reduction.

Figure 2: Current percent of products (or UPCs) containing and suppliers who using High Priority Chemicals in products, along with the respective percentage point changes since 2014.

The tools for success

In the end, Walmart continues to make progress against its policy as demonstrated through real data. Beyond data, what else contributes to Walmart‘s success?

  • Clear targets
  • Driving action through the business (where relationships between buyers and suppliers stress the importance of the commitments)
  • Public accountability

With new notable commitments popping up from other major retailers like Target and CVS, we hope to see similar tracking and reporting of meaningful results both directly and through the Chemical Footprint Project survey.

FURTHER READING: See EDF’s previous analysis of Walmart’s first year results here and here.


Boma Brown-West is Senior Manager of Consumer Health at EDF + Business. You can follow her on Twitter for insights and analysis on safer chemicals leadership in the supply chain and subscribe to her Behind the Label newsletter here.

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Research competition invites students to solve real-world energy problems

Reviewing residential electricity data in Pecan Street’s Pike Powers Lab.

By Maddie Venn, clean energy communications intern

Recently, it seems like everyone is competing to become the next big thing in the energy sector. Whether it’s electric vehicles, smart grid technology, or energy storage, innovation continues to pop up left and right as we work to build a smarter, cleaner electric grid.

If innovation and technology spark your competitive drive, here’s your opportunity to dive in and join a community of engaged researchers working to solve some of our most pressing energy concerns. Pecan Street is hosting its second student research competition, inviting the best and the brightest to use the organization’s extensive collection of energy-use data to help solve real-world problems.

Open to all full-time graduate and undergraduate students and with prizes totaling $10,000, the competition aims to connect Pecan Street’s well-established dataset with the innovation of young minds. As the grid gets smarter, data can help people play a more active role in how their electricity is made, moved, and used. Competitions like Pecan Street’s will get us there faster.

What is Pecan Street?

Founded in Austin, Texas with the goal of better understanding the behavior of energy users, Pecan Street’s research network provides the most granular understanding of electricity and water use on the planet. The organization is collecting massive amounts of anonymized data in real time from thousands of houses across the nation, providing a near-constant stream of data on water and energy use.


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The data collected at these different sites is compiled and made available to university researchers around the world interested in finding out more about the way people interact with the grid. With this information, the possibilities for discovery and innovation are seemingly endless, presenting both a challenge and an opportunity to all interested researchers.

The competition

To help spark some of these new and innovative ideas, competition organizers have provided a list of potential research topics that may be of interest to students, including:

  • understanding the breakdown of energy use within the home,
  • characterizing what impact young children have on grid flexibility, and
  • understanding how charging electric vehicles at different times impacts the grid.

Each suggested topic can serve as a jumping off point for research that can have significant real world implications. While it is recommended that researchers utilize these suggested topics, it is not required.

In a previous competition, the student who won first prize used Pecan Street’s dataset to ease the pressure that residential air conditioning puts on the grid. Using a centralized control, the winner created a system to adjust thermostats and distribute use throughout the day. This cuts pollution by reducing the need for costly, dirty “peaker” plants, which operate only a few hours each year when demand is high (like on a hot summer afternoon when many people simultaneously crank up the AC).

In a previous competition, the student who won first prize used Pecan Street’s dataset to ease the pressure that residential air conditioning puts on the grid. 

The opportunity for discovery with this next round of competition grows even larger as Pecan Street expands its testbed and data collection.

Interested?

Visit Pecan Street’s website for more information and suggested research topics. All proposals must be submitted to info@pecanstreet.org by January 30, 2018 to be considered. Four finalists will be selected and flown to Austin to present their research at Pecan Street’s annual research conference, with the chance to win big and get involved with this up-and-coming research community.

Smart grid technology is already transforming our energy system, and there has never been a better time to get involved in this fast-growing industry. The future of the national grid may be impacted by the work that comes out of this competition, and you could be influential in the next wave of energy innovation.

This post originally appeared on Energy Exchange blog.

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The energy sector needs to adapt to millennials—not vice versa

By EDF Blogs

By Elizabeth Villedrouin, Communications Intern, Clean Energy and Kristen Moore, Research Intern, Clean Energy

As interns at Environmental Defense Fund (EDF), we’ve been tapped as resident experts on surviving on college budgets, social media, and all things Millennial.  Research tells us Millennials are the largest living generation. So, as Clean Energy interns this summer, we’ve learned that gives us much power to change the game for the energy sector. But in unexpected ways.

As young people, we’re working at EDF because we want to promote systemic, market-based solutions and new energy technologies that shift our country toward a clean energy future and away from our fossil fuel past (did someone say solar paint?).

We have high standards for our energy future, and our priorities differ from our parents’ (for example, millennials tend to value careers [PDF] over religious life). And although we’re the thriftiest generation, 64 percent of us are actually willing to pay more on our electric bill if it’s generated by clean energy.

Shifting the economy

Although a generation that has been slow to invest, millennials are now buying stocks in companies that further the clean energy economy. Among millennials’ favorite stocks are companies like Apple and Facebook who declared their commitment to rely on 100 percent renewable energy through RE100. Others include Amazon, which launched four wind and solar farms in 2016 and publicly supported the Clean Power Plan; Tesla, which started selling solar panels this year; and Nvidia, which plans to reduce emissions by 15 percent per employee by 2020 and only operates in buildings that comply with LEED standards.


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We like to put our money where our values are. Our generation is the most likely to pay more for responsibly made products and roughly 80 percent of us want to work for companies that care about their impacts. Nearly 400,000 millennials are currently working in green jobs.

Energy-efficient lifestyles

For a variety of economic and social factors, our lifestyles tend to be more energy efficient. Many of us are choosing buses and bikes over cars. And we’re more likely to purchase new, energy-saving products and services like Nest learning thermostats than people over 55, according to research by Accenture.

“Energy providers must take these and other insights about these groups to heart, to unlock value, because consumers’ preferences and behaviors are rapidly changing the market landscape,” said Tony Masella, managing director of Accenture Energy Consumer Services.

Appeal to our drive for progress and prosperity based on clean, equitable energy solutions.

Push-back against fossil fuels

Students from hundreds of colleges and universities have led successful movements urging their administrative leaders to divest from fossil fuels. Educational institutions make up 14 percent of the approximate $5.42 trillion value of institutions around the world that have divested from the fossil fuel industry. 600 colleges and universities are already members of the Climate Leadership Network, a network of institutions committed to action plans to achieve carbon-neutrality in the coming future. But, for some students, these commitments mean nothing if their schools are still buying stock in fossil fuels, even if the financial impact to the industry is slim.

Our advice: Don’t sleep on us

In order to thrive, today’s energy sector should engage its youngest customers – which happen to be America’s most tech-savvy, environmentally conscious generation. Attempts to garner support for fossil fuel would be like Sony trying to sell us Walkmans –futile. Appeal to our drive for progress and prosperity based on clean, equitable energy solutions.  More and more, we are the ones making important energy decisions –as building managers, homeowners, engineers, utility regulators, and, one day, the next head of the Department of Energy.

 

Photo source: wundervisuals

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