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Time Has Come Today - Are We Entering the Age of Certified/Differentiated Natural Gas?

Certified or differentiated natural gas — an upgrade from the old “responsibly sourced gas” — is on the rise. More and more producers, pipeline companies, gas utilities and LNG exporters and buyers want their gas to be certified as having a lower emissions profile, and for a variety of reasons, chief among them achieving their ESG goals and winning over ESG-minded investors and customers. But while there’s a consensus that methane and other greenhouse gas (GHG) emissions can and should be reduced significantly, there are differing views about the best ways to monitor wells, pipelines and other infrastructure for methane leaks, measure total emissions, and ensure that emission reductions are real and sustainable. In today’s RBN blog, we continue our deep dive on certified/differentiated gas with a look at the approaches the leading certification/differentiation entities and others are taking in emission monitoring, measuring and scoring. 

As we said in Part 1, the global push to reduce stray methane emissions from natural gas-related operations — from production wells to end-users — and to certify or differentiate gas as having a lower emissions profile has been accelerating and broadening. It now seems possible that within the next two or three years the majority of gas produced in the U.S. will be certified/differentiated regarding its methane intensity and other environmental qualities, and that large numbers of gas buyers will be buying certified/differentiated gas, or at least moving toward doing so. Further, a liquid certified gas market is developing, as are tracking systems to ensure that the certified gas sold is legit and fully accounted for, with no double-counting or fuzziness.

In all of our blogs about certified or differentiated gas — market participants usually prefer one term or the other — we like to point out a couple of important realities: (1) Methane (CH4) is a particularly potent GHG, with more than 80 times the atmospheric heat-trapping effect of carbon dioxide (CO2) over the short term (five to 20 years); and (2) For either certified/differentiated or plain-old natural gas, the volumes of CH4, CO2, and other GHGs generated from the production wellhead to the point where the gas is to be burned pale in comparison with the massive volumes of GHGs released by the combustion of that gas by end-users. 

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