By Ben Ratner, Environmental Defense Fund Good energy policy ideas can come from all corners, and Wall Street is no exception. Goldman Sachs recently served up a powerful case for action on methane in a stroke of market logic grounded in data. In a recent report, the investment bank argues that environmental regulation is more than a necessary evil when it comes to oil and gas development—it’s a vital enabler for economic growth. There’s power in diverse groups coming together. Goldman’s insight for the U.S. oil and gas industry—that the current environmental policy vacuum is a major cause of investor queasiness—suggests that markets can help drive environmental progress. Business, investors, policymakers can join forces Among the policy priorities Goldman Sachs identifies in its report is the establishment of strong and stable rules to ensure companies follow safer development practices and reduce emissions of methane. A highly potent greenhouse gas and the primary ingredient in natural gas, methane is leaking from across America’s natural gas supply chain. It's now responsible for more than one-third of today’s greenhouse gas emissions worldwide. With “timely cooperation among business leaders, investors and policy makers;” however, Goldman Sachs believes that strong methane policies are feasible in the not-so-distant future. Investors need market certainty As public controversy abounds over the environmental impacts of producing new supplies of American oil and gas and policy uncertainty persists, Goldman Sachs believes large would-be investors will keep their mega-checkbooks holstered. Or, more likely, they will re-direct those checks to foreign competitors in countries where projects can proceed with more market certainty. That means that although North America could add up to 2 million jobs in traditional manufacturing and other industries over the next decade, it’s far from certain to investors that policy and market dynamics will allow the United States to grab this opportunity. Removing this uncertainty is where the investment bank sees a clear role for regulation. Goldman’s report shows that, although investment surged in the North American upstream oil and gas industry, investment lagged foreign nations 15-to-1 in downstream industries such as chemical plants that use products developed in the fields for manufacturing. This is partly because investors lack confidence that upstream supply will be stable over time given controversy and the lack of strong policy. Or as Goldman Sachs CEO Lloyd Blankfein recently observed on the Charlie Rose Show, industry operators who get new facilities permitted in the absence of methane rules will achieve “a very hollow victory.” Methane message resonates with industry I represented Environmental Defense Fund at the Goldman Sachs North American Energy Summit last month. My remarks to the summit focused on methane because it’s the linchpin to the climate performance of the oil and gas industry—and a litmus test for its ability to address a broader suite of very real environmental concerns. If we take a proactive approach and fix the methane problem, we can begin reducing the environmental risks from unconventional oil and gas development and provide more assurance that the public and the markets need to reap economic benefits. The best way to do this is with a smart, comprehensive, and timely national methane policy, building on President Obama’s methane strategy in the Climate Action Plan, and an ongoing EPA analysis. Such an approach could ensure that we cut emissions as much as possible, as quickly as possible, and through a consistent framework that works for businesses, I told the summit. It could draw heavily on the experience of leading states like Colorado, which brought together industry and environmentalists to forge sensible standards that are keeping methane in the pipes and out of the atmosphere. I was encouraged to hear interest in policy collaboration from multiple industry and investor leaders. These forward-thinkers understand that while methane and the other important environmental challenges with oil and natural gas won’t go away on their own, they can be minimized if we roll up our sleeves and establish the kind of policy certainty Goldman identifies as a driver of business value. This blog post originally appeared on the Environmental Defense Fund’s website.