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Corporate Social Responsibility
News
10.08.2003 ET
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Institutional Investors Voice Concerns About Natural Gas Development
Call on Industry to Adopt Best Practices
(CSRwire) SAN FRANCISCO, CA -- On the eve of a major energy investment
conference in San Francisco, a dozen institutional investors representing
over $15 billion in assets today raised concerns about growing problems
with the natural gas industry's environmental impacts in the Rocky
Mountain states.
In a letter to the Independent Petroleum Association of America (IPAA),
which represents gas producers, the investors and financial advisors
called on the industry to adopt a set of best practices in the development
of coalbed methane (CBM), a form of natural gas (to obtain a copy of the
letter, contact one of the above contacts). The proposed practices are
designed to protect local communities and long-term shareholder value.
Many of the investors hold shares of natural gas firms, "in recognition of
the reduced emissions from combustion of natural gas compared to combustion
of other fossil fuels," the letter states. However, the investors warn
that the "rush to develop coalbed methane as a new energy source in the
United States raises significant environmental and social concerns."
As an example, the investors cite data from the U.S. Bureau of Land
Management that shows that current plans for coalbed methane extraction in
Wyoming's Powder River Basin will result in the pumping and discharge of
700 million gallons of potentially contaminated groundwater per day,
posing threats to both underground aquifers and local streams and rivers.
Steve Lippman, Senior Social Research Analyst with Boston-based Trillium
Asset Management Corporation, said, "We feel that the best practices
we've outlined represent a win-win situation for both the gas industry and
the people who live in areas impacted by coalbed methane development."
"As investors, we believe that potential environmental liabilities and
cleanup costs should be addressed early on in the process to reduce
long-term financial risks, and we've proposed best practices to do that,"
says Lily Donge, Social Research Analyst at the Calvert Group, Ltd.
The letter to IPAA, which is convening the San Francisco investment
conference, asks IPAA companies to adopt industry-wide strategies to:
Protect private property. CBM operators can currently enter and
develop wells on private property without landowner consent.
Treat or re-inject wastewater from CBM wells. CBM wells dump
hundreds of millions of gallons of highly saline water onto the ground and
into streams each day, and have damaged crops and threatened
fisheries in some communities.
Use best available drilling technology to protect domestic drinking
water supplies, sensitive lands, and wildlife, and reduce impacts to
communities. Currently, CBM operators primarily use the lowest-cost
technology, which results in heightened surface impacts, impacts to
domestic water wells, noise from compressors, and other problems.
Completely reclaim areas disturbed by CBM development. Current
federal bonding requirements are inadequate to cover reclamation costs,
and often result in taxpayer funding of well cleanup.
Ensure full and fair representation of affected people and
communities in the decision-making process.
The letter states, "As investors, we will be encouraging individual
companies among our portfolio holdings to take these steps and seek to
promote adoption of these practices across the natural gas industry. We
believe that responsible development of coalbed methane resources in ways
that are sensitive to the environment and community concerns are in the
best long-term interests of our country, natural gas companies, and their
shareholders."
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