Record volumes of environmentally certified gas have hit the market after nearly two dozen U.S. gas producers committed to external assessments of their emissions and ESG criteria last year.
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Last week, two US gas producers announced the completion of third party certification processes adding up to 5 Bcf/d of certified gas in Appalachia.
EQT, the largest US gas producer, announced on January 14 that it has certified the majority of its natural gas production to both Equitable Origin’s EO100 standard for responsible energy development and the MiQ standard on methane emissions. The manufacturer received both certifications in November, with more recent digital attribute certificates becoming available, according to a Jan. 14 press release. EQT produces about 4 Bcf/d in Appalachia.
“These results not only allow us to target growing domestic and international markets evaluating a differentiated commodity, they also serve as important validation of the environmental properties of Appalachian natural gas,” said Toby Rice, CEO of EQT, in a statement dated January 14.
EQT has also partnered with Denver-based continuous monitoring company Project Canary on a pilot program that installed Canary X sensors on two oil rigs in Southwest Pennsylvania.
Earlier in the week, the National Fuel Gas Company announced that its production arm, Seneca Resources, had received certification of Equitable Origin for just over 1 Bcf/day of gas production in Appalachia.
“Looking forward, we expect that the certification of all of Seneca’s Appalachian natural gas base will highlight our responsibly sourced, low-methane-intensity production to end-user and commercial markets,” Justin Loweth, president of Seneca Resources, said in a statement May 11 . January .
Like EQT, Seneca Resources has partnered with Project Canary for a pilot program that will evaluate gas production of approximately 300 MMcf/day in Appalachia.
The two statements follow two previously announced certifications in December that added 1.2 Bcf/d of certified gas in the Haynesville Shale.
On December 21, Chesapeake Energy confirmed that it had completed Equitable Origin and MiQ certification for approximately 1 Bcf/day of Haynesville’s gas production. The producer has also partnered with the two organizations to certify its Appalachia gas production, which is expected to be completed by the end of the second quarter of 2022, and has signed pilot project agreements in both basins with Project Canary. Additionally, Vine Energy, a Haynesville producer acquired by Chesapeake in November, applied for Project Canary certification for all of its production in August.
On December 8th, BPX Energy, BP’s US onshore production company, announced that it had received an “A” rating in the MiQ standard for approximately 200 million cubic meters per day of gas production in South Haynesville, Texas.
As the market for certified gas is still in its infancy, no clear consensus has been found on how and where this new product will be traded.
Several platforms to facilitate trading and tracking of certified gas certificates – either bundled with physical natural gas or unbundled – have emerged, including MiQ Digital Registry and Xpansiv.
MiQ launched its global secure digital ledger, the MiQ Digital Registry, in December to store and track certificates from issuance to retirement. As many manufacturers opt for multiple certifications, the MiQ Digital Registry has offered joint MiQ EO100 certificates as well as MiQ certificates. In addition to EQT, at least two other US manufacturers have simultaneously applied for certification from both MiQ and Equitable Origin.
Xpansiv, an exchange specializing in environmental commodities such as carbon offsets and RECs, partnered with S&P Global Platts in early October to launch methane performance certificates that can be issued and tracked using Xpansiv’s Digital Fuels Registry .
Platts MPCs represent gas produced with a methane intensity of 0.1% or less and are separate from the natural gas production used to generate each certificate. On January 13, the price of an MPC was estimated at $0.049/MPC or $7.903/mtCO2e.
Xpansiv has also partnered with Project Canary, agreeing in November to enable sharing of methane emissions data collected by its continuous monitoring systems.
EQT, Chesapeake Energy and BPX Energy all said they received an “A” grade on MiQ’s sliding scale of “A” to “F”. An “A” grade represents a methane intensity of 0.05% or less, while an “F” is closer to 2%.
To put a 0.05% intensity into perspective, One Future, a consortium of energy companies committed to reducing methane emissions, had a target for the gas production sector of 0.283% in 2020, according to its latest methane emissions intensity report .