Over the past couple of years, a growing number of natural gas producers — from global integrateds like ExxonMobil, Chevron and BP to E&Ps large, medium and small — have contracted with entities like MiQ and Project Canary to scrutinize their upstream operations and score their relative success in minimizing methane emissions. By some estimates, as much as one-third of U.S. gas production is already “certified” or “differentiated,” and with growing interest in “low-emissions” gas among domestic and international buyers the trend seems likely to accelerate. In today’s RBN blog, we continue our look at certified/differentiated gas with a review of the gas producers leading the way.
In this blog series, we’re examining the certified/differentiated gas ”movement” from just about every angle. In Part 1, 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 — that is released into the atmosphere along its route from the production well to the end-user’s burner tip. We noted that there’s good reason for zeroing in on methane emissions: Methane is a particularly potent greenhouse gas (GHG), with more than 80 times the atmospheric heat-trapping effect of carbon dioxide (CO2) over the short term (five to 20 years). That means reducing methane emissions along the gas value chain has quick and very positive climate effects.
In Part 2, we focused on the push by natural 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 — things like upgrading equipment, accelerating the replacement of compressor seals, and expanding leak detection and repair (LDAR) programs — and the ongoing debate (see Cover Me) 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 either MiQ or Project Canary (aka Canary), with MiQ accounting for well over half of those volumes.
Today, we turn our attention to what producers have been doing on the gas certification/differentiation front. Before we get to a company-by-company review, we should make a couple of general observations. One is that while many (and probably most) oil and gas producers are surely tracking developments in the methane emissions-reduction space — and many of these are ramping up their methane-emissions monitoring and LDAR programs — a much smaller number have contracted to have MiQ or Canary put all or part of their production wells under the microscope. A second observation is that, for the most part, many of the dozen-plus producers that have gone all in on certification/differentiation are gas-focused E&Ps in gas-centric production areas like Marcellus/Utica, the Haynesville, and Wyoming’s Green River Basin. That makes perfect sense, given that — so far, at least — many of the gas buyers most interested in low-emissions gas are LNG exporters along the Gulf Coast and gas utilities and other gas buyers in the Northeast, Midwest and West.
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