Berkeley, March 05, 2020 (GLOBE NEWSWIRE) -- Shareholder advocacy group As You Sow and nonpartisan policy think-tank Energy Innovation released Natural Gas: A Bridge to Climate Breakdown, a report addressing the opportunities presented by the clean energy transition and the risk of overreliance on natural gas for utilities.
As coal’s inevitable decline in U.S. electricity production continues, natural gas, which is largely replacing coal, is a growing source of climate concern. Forming part of utilities’ initial response to demand for lower-carbon energy, natural gas infrastructure build-out continues to rapidly expand across the U.S. Yet despite its reputation as the cleanest burning fossil fuel, natural gas generates considerable climate impacts through direct combustion and methane leaks across the supply chain. New reports continue to find that methane emissions are likely much worse than previously estimated.
As the window to address climate change narrows, investment in new natural gas infrastructure is increasingly incompatible with a climate-stable future. The natural gas bridge to a carbon-free future must have a clear end in sight. Natural Gas: A Bridge to Climate Breakdown raises critical questions about why utilities continue investing in gas infrastructure, and what is at stake if emissions and costs are locked into place through such investments.
“As climate change increases risk to investor portfolios, shareholders must scrutinize what role fossil gas can play in the inevitable transition to a clean-energy economy,” said Lila Holzman, energy program manager at As You Sow. “Utilities clinging to business models that rely on fossil fuels are jeopardizing their ability to meet critical climate goals (including their own) and will miss out on opportunities to benefit from new technology advances.”
This timely report reveals how the proliferation of gas infrastructure contributes to distinct risks that threaten shareholder value. While progress in reducing utility sector greenhouse gas emissions is being made, as seen by the increasing number of utilities setting mid- and long-term decarbonization targets, concerns remain as to what extent gas’ expansion may jeopardize those goals. The report reviews the current policy, economic, and technology landscape and the related opportunities and challenges utilities must navigate in the face of the ongoing clean-energy transition.
“Renewables like wind and solar, complemented by flexible zero-carbon resources like storage and demand response, are already providing the same reliability services and energy as new natural gas plants at lower cost,” stated Mike O’Boyle, director of electricity policy at Energy Innovation. “New gas infrastructure is increasingly likely to become stranded — the natural gas ‘bridge’ must end now if investors want to avoid massive stranded asset cost risk.”
For the first time this year, shareholder group As You Sow filed related resolutions with large utilities Sempra, Dominion, and Southern Company raising investor concern for stranded gas assets. The resolutions ask these companies to explain how they are preparing for the likely reduction in natural gas demand in the face of accelerated action to confront the climate crisis.
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As You Sow is a nonprofit organization that promotes environmental and social corporate responsibility through shareholder advocacy, coalition building, and innovative legal strategies. See our resolutions here.
Energy Innovation is a nonpartisan energy and environmental policy firm. We deliver high-quality research and original analysis to policymakers to help them make informed choices on energy policy. We focus on what matters and what works.