2015 Shareholder Resolution
Company: Kinder Morgan, Inc.
Topic: Methane

WHEREAS:

Methane emissions are a significant contributor to climate change, with an impact on global temperature roughly 86x that of CO2 over a 20-year period. Methane represents over 25% of 20-year CO2 equivalent emissions according to the Environmental Protection Agency (EPA) Greenhouse Gas Inventory.

Methane is emitted by oil production and all sectors of the natural gas industry, from drilling and production, through processing and storage, to transmission and distribution. Given that methane is the primary component of natural gas and a potent greenhouse gas, reducing these emissions results in many environmental, economic and operational benefits.

A 2013 study, “Anthropogenic Emissions of Methane in the United States,” finds EPA prescribed methodologies “underestimate methane emissions nationally by a factor of ~1.5.” The EPA’s auditor refers to current emissions estimates as being of “questionable quality.”

In 2014, as part of the President’s Climate Action Plan’s “Strategy to Reduce Methane Emissions,” the Department of Energy announced a series of actions to help modernize the nation’s natural gas transmission and distribution systems and reduce methane emissions. Potential areas for research and development include: external leak detection and flow rate quantification technologies/methodologies; pipeline inspection and repair; development and deployment of smart sensors for pipeline operational efficiency; and improving compressor system operational performance.

A failure by companies to proactively reduce methane emissions may invite more rigorous regulations. The President’s Climate Action Plan empowers the EPA to determine how to reduce methane emissions.

States have begun to adopt stricter regulations. In 2014, Colorado approved regulations to fix persistent methane leaks. Industry representatives who helped craft the regulations called them “the right thing to do for our business,” noting that the regulations are needed to ensure their investments pay off.

Benefits of reducing methane emissions include worker safety improvements, maximizing available energy resources, protecting human health, reducing environmental impacts, and reducing economic waste. Upgrading assets may also improve performance, making equipment more robust and less susceptible to accidents, upsets and downtime. Significant reductions in methane emissions are possible using new technologies with positive return on investment.

RESOLVED:

Given the societal and economic benefits of reducing methane emissions, shareholders request that Kinder Morgan, Inc. issue a report (by September 2015, at reasonable cost, omitting proprietary information) reviewing the Company’s policies, actions and plans to measure, mitigate, disclose and set quantitative reduction targets for methane emissions resulting from all operations under the Company’s financial or operational control.

SUPPORTING STATEMENT:

The report can include best practices, technologies and methodologies, environmental impacts, quantitative reduction targets and methods to track progress for reducing methane leakage or venting from transmission systems. Real-time measurement and monitoring technologies are recommended.


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