We have a robust enterprise risk management process for identifying, assessing, and managing risk and monitoring risk mitigation strategies. Our multidisciplinary Risk Management Committee comprises managers from various parts of our organization – including Operations, Legal, Finance, Investor Relations, and Environmental Compliance – and regularly reports to our Senior Management Team and to the Audit Committee of the Board.
The Risk Management Committee monitors risks related to climate change as part of our enterprise risk management process, including legal and regulatory risks, market risks, reputational and community risks, and the physical risks associated with extreme weather events or long-term impacts due to changes in weather patterns. Range views regularly conducting a scenario analysis as an important strategy to identify, assess, and manage evolving climate change risks.
Actions to Manage Climate Change Risks
Our actions are guided by our strategy as previously outlined. As this climate change risk management approach is further developed and formalized, we will continue to evaluate potential action plans for addressing risks and opportunities.
Range is fully committed to identifying solutions that protect the public good, and we are engaged in public policy discussions and consultations among peers and other industry participants in that pursuit. These solutions are key to allowing our industry to continue to serve our communities with cleaner and responsible energy production.
Range’s systematic and methodical approach to reducing our carbon footprint includes an annual review process of available options in terms of technological improvements and changes in design. Importantly, our proactive approach to address risks related to carbon emissions focuses on continuous improvement, which drives innovation and encourages long-term thinking on how to achieve our emissions reduction goals. These efforts include:
- Continued progress in accurately measuring, monitoring, and reporting on emissions.
- Our pioneering approach to water management constitutes a significant portion of our risk management efforts, as we engage in industry-leading practices that advance water preservation, water quality, and community safety.
- Our proactive approach to emissions reductions and water management helps us gain efficiencies, which keep us in alignment with our strategic objective to maintain a low cost of production to remain competitive and resilient during potential market disruptions.
- Robust business continuity plans, which consider multiple sources of business disruptions, including severe weather events.
Vital to our success is a close working relationship with our communities, with whom we communicate our commitment to environmental stewardship and information regarding any potential impacts. This close relationship ultimately helps us protect our social license to operate and strengthens our reputation in the communities we serve.
Climate Change Opportunities
In addition to risks, we believe that global climate change challenges present several opportunities for our business, as we believe our products and services can play an important role in the transition to a low-carbon economy.
- Industry Leadership. We aspire to become one of the first natural gas producer to achieve net zero Scope 1 and Scope 2 GHG emissions by 2025 through absolute emissions reductions and the use of carbon offsets associated with reforestation and improved forest management, as well as other available and emerging offset methodologies. Along with our goal of net zero Scope 1 and Scope 2 GHG emissions by 2025, we are committed to long-term continuous improvement in emissions reductions. We hope that by being an industry leader in addressing climate change challenges, we can yield significant benefits in our relationships with our employees, our communities, and our investors.
- Operational Efficiencies. Our focus on environmental stewardship has resulted in significant operational efficiencies and cost savings both in relation to our emissions reductions efforts and our water management initiatives. For example, the installation of plunger lift systems and our leak detection and prevention processes and procedures have allowed us to save and sell gas that would have otherwise been emitted in the atmosphere. Our water recycling program not only allows us to reuse water, but, through our reliance on a network of transfer pipelines, we are able to reduce costs and associated emissions from the reduction of truck traffic.
- Market Demand. Natural gas is a significantly cleaner and more efficient fuel compared to other fossil fuel sources. According to the U.S. Energy Information Administration, for the same amount of energy, natural gas produces between 43 and 49 percent less CO2 emissions compared to coal-based fuels and between 26 and 27 percent less CO2 emissions compared to diesel and gasoline. As demand for higher-emitting fuels may be reduced, we believe natural gas presents a safe, environmentally friendly, and cost-effective alternative.
- Access to Capital. From an investment perspective, Range seeks to differentiate itself among other natural gas producers. The state of Pennsylvania, where most of our production is located, has a modern regulatory framework for producers, with some of the strictest state regulations. As production in the Marcellus basin is focused on natural gas (and not oil), our emissions are significantly lower compared to oil and gas producers in other parts of the country. Further, our cost of production is among the lowest in the industry, which renders our reserves more resilient and more profitable over the long term.