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Time Has Come Today - Utilities, Other Natgas Buyers Dip Toes in Certified/Differentiated Gas Market

The drive to minimize methane emissions along the natural gas value chain — and have entities like MiQ and Project Canary certify or differentiate natgas as “low-emissions” — may have started upstream with E&Ps eager to boost their environmental cred, but the effort also has been monitored closely by gas utilities, industrials and others that consume large volumes of gas, and regulators. In what may be a hint of what’s to come, a number of initial deals for certified/differentiated gas have been announced and a handful of pilot programs are in the works. In today’s RBN blog, we continue our examination of the emerging low-emissions natgas market with a look at “first-mover” gas buyers and regulatory bodies. 

In Part 1 of this blog series, we said there are a variety of efforts underway to make the natural gas piece of the global energy puzzle as clean as it can be. The primary focus of these efforts is on reducing as much as possible the amount of methane (CH4) — the main ingredient in natural gas (and a particularly potent greenhouse gas, or GHG) — that is released into the atmosphere along its route from the production well to the end-user’s burner tip.

In Part 2, we focused on the push by gas producers to have their gas certified as a “low-emissions” hydrocarbon and differentiated (i.e., scored or assessed) based on the percentage of methane that escapes into the atmosphere during the production process, with higher marks being given to gas with a lower methane intensity (MI). We also discussed the proactive steps producers are taking to reduce their MI and the ongoing debate about the most effective ways to monitor well sites, pipelines and the rest to ensure good measurements and identify methane leaks. Further, we discussed the two primary alternatives for gas producers seeking to certify or differentiate their gas (MiQ and Project Canary) and noted that as much as one-third of the natural gas being produced in the U.S. each day is certified/differentiated by one of them.

Last time, in Part 3, we detailed the efforts that 20 U.S. producers at the forefront of this movement have been undertaking to certify/differentiate their gas. Most of these efforts have been occurring in the gas-focused Marcellus/Utica and Haynesville production areas, though a handful of E&Ps are having MiQ or Project Canary score or assess at least some of their production in the Denver-Julesburg (DJ), the Permian and other basins. 

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