Resolved clauseResolved, shareholders request that Williams issue a report analysing a critical climate change concern, the reliability of its methane emission disclosures. The report should:
- be made public, omit proprietary information, and be prepared expeditiously at reasonable cost
- summarize the outcome of efforts to directly measure methane emissions by Williams, using recognized frameworks such as OGMP;describe any material difference between direct measurement results and Company’s reported methane emissions;
-assess the degree to which any differences would alter estimates of the Company’s Scope 1 emissions.
Whereas clauseWhereas, methane is at least 80 times more potent than carbon dioxide over a 20-year period. In 2020, 32% of U.S. methane emissions from human activities came from natural gas and petroleum systems.[1] According to the United Nations Environment Programme, cutting methane is the strongest lever we have to slow climate change over the next 25 years.[2]
The Environmental Protection Agency (EPA) methodology used to estimate methane emissions fails to capture many major leaks, wasting valuable product worth $2 billion per year. Studies have found actual emissions to be 50 to 100% higher than reported emissions.[3] In certain basins, emissions are more than 10 times industry disclosed figures.2 Therefore, oil and gas industry Scope 1 emissions may be significantly higher than currently reported. Methane emissions can be quantified directly through measurement (e.g., by detector, drone or satellite), or indirectly through calculations and modelling. Estimates improve when direct measurement methodologies are used, when emissions are identified by source type and at a site or facility level, and then reconciled, as shown by the Oil and Gas Methane Partnership 2.0 (OGMP).[4]
In 2021, investors managing more than $6 trillion supported strong federal methane regulations. The U.S. joined the Global Methane Pledge, committing to using best available inventory methodologies to quantify methane emissions. Companies across the world, including ConocoPhillips, Devon, Occidental and Pioneer, have joined the OGMP, committing to improving methane data quality and consistency.[5] Companies that do not adequately manage methane emissions risk their reputation and license to operate, as investors, regulators and civil society are setting expectations to address this issue.
Williams is a member of GTI Project Veritas, which provides funding for research to test and develop new, innovative technology to measure methane emissions, and monitors and quantifies methane emissions at the source level in the Haynesville basin. [6] However, Williams has not taken the critical steps to reduce investor concerns by using direct methane measurement across all operations and reporting on it.
[1] https://www.epa.gov/ghgemissions/overview-greenhouse-gases
[2] https://www.ccacoalition.org/sites/default/files/press/GMA%20Press%20Release%20FINAL.pdf
[3] https://www.seas.harvard.edu/news/2021/03/oil-and-natural-gas-production-emit-more-methane-previously-thought, https://www.nature.com/articles/s41467-021-25017-4
[4] https://business.edf.org/files/Investors-Guide-to-the-OGMP_09.17.21_FINAL.pdf
[5] http://ogmpartnership.com/partners
[6] https://www.williams.com/wp-content/uploads/sites/6/2021/07/2022-CDP-Climate-Change-Questionnaire_The-Williams-Companies-Inc..pdf
Supporting statementAt management’s discretion, we recommend that the report describe: the types of source- and site-level measurements used;plans to improve emission estimates over time, consistent with frameworks such as OGMP;any material difference between third-party direct measurements results and Company’s reported methane emissions, by site or region; andplans to validate emissions estimates and disclosure through a third-party audit or evaluation