The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

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Monday, September 8, 2014

Strategic CSR - Natural Gas

As ever, unintended consequences serve to undermine even the best of intentions. The article in the url below indicates how efforts to reduce carbon emissions can actually end up increasing them (see: Strategic CSR – The Jevons Paradox). In particular, it focuses on efforts to convert various transportation vehicles (e.g., buses and trucks) from diesel to natural gas:
 
"Although burning natural gas as a transportation fuel produces 30 percent less planet-warming carbon dioxide emissions than burning diesel, the drilling and production of natural gas can lead to leaks of methane, a greenhouse gas 30 times more potent than carbon dioxide."
 
The research, which was conducted by researchers at Stanford, MIT, and the Department of Energy, concluded that the increase in methane emissions offset the savings that resulted from the fuel switch:
 
"Those methane leaks negate the climate change benefits of using natural gas as a transportation fuel. … The study concludes that there is already about 50 percent more methane in the atmosphere than previously estimated by the Environmental Protection Agency, a signal that more methane is leaking from the natural gas production chain than previously thought."
 
While switching from diesel to natural gas is a wash, however, the difference in emission levels is sufficiently large to make a switch from coal-fired power stations to natural gas-fired power stations worthwhile:
 
"Natural gas emits just half the carbon pollution of coal, and even factoring in the increased pollution from methane leaks, natural gas-fired plants lead to less emissions than coal over 100 years, the study found."
 
As usual, there is a solution that relies on an empowered stakeholder taking action. The methane, which leaks from "drilling wellheads, valves and pipelines," can be blocked if oil and gas companies are made to invest in existing technology that can prevent such leaks:
 
"The regulations would require that oil and gas companies install equipment at wellheads to capture the leaks, use valves in production facilities that do not allow methane to escape and have regular inspections."
 
Why energy companies are not being more progressive on this issue is puzzling, however, since they clearly have an economic incentive to minimize threats to the industry:
 
"The oil and gas industry has consistently resisted new regulations. Natural gas developers say that it is in their interest to capture methane since it is a component of natural gas and can be sold as such. Allowing it to escape causes them to lose money."
 
Take care
David
 
David Chandler & Bill Werther
 
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Study Finds Methane Leaks Negate Benefits of Natural Gas as a Fuel for Vehicles
By Coral Davenport
February 14, 2014
The New York Times
Late Edition – Final
A12