From upstream production through midstream transport and downstream delivery, there’s an increased focus on managing the sourcing of energy molecules. While stakeholders have come to expect environmentally conscious developments within alternative fuel and renewable energy markets, many are demanding the same from conventional sources such as natural gas. A demand for which responsibly sourced gas (RSG) has risen to the challenge. Keep reading below to learn how.
The Natural Gas Industry’s Current State
In the United States, the oil and natural gas industry is the largest industrial source of methane emissions – emitting more methane than 164 countries’ total greenhouse gas (GHG) emissions combined. While that is an alarming figure, the industry understands they have no choice but to reduce GHG emissions across the natural gas supply chain: minimizing their current and future impact on our climate and global communities.
“These industries are quickly approaching a tipping point in terms of gas sourcing and marketing. With new technologies and satellite emissions monitoring, organizations are realizing they must take a proactive approach to ensure they are utilizing the highest standards and practices in all phases of their operations if they want to remain competitively viable.”
– Lynn Lyon, U.S. Gain’s Director of Business Development – Sustainable Transportation
Many of these sustainability initiatives are being driven at the federal level. On November 2, 2021, the Biden administration proposed a new Clean Air Act rule. This regulation seeks to achieve significant emission reductions in methane levels as well as harmful air pollutants, cost-effectively – improving air quality across communities. As part of this act, the EPA is accepting comments on additional sources of methane to further strengthen emission controls and increase reductions within fossil fuel markets: reductions that RSG is helping facilitate.
What is RSG and How Does it Work?
Responsibly sourced gas is still conventional natural gas – the type that is mined from wells across the world and injected into our pipelines. However, what makes RSG different is that it has undergone stringent third-party certification, verifying that the highest standards and practices were used to minimize greenhouse gases across its value chain – from start to finish.
It’s no longer acceptable for gas to only be sustainable once it’s consumed as a fuel or energy source. Consumers and corporations alike want to know that the gas they use was procured, conditioned, and transported sustainably. With RSG, organizations and utilities gain assurance that their gas meets environmental, social, and governance (ESG) standards – accounting for its impact on air quality, land use, water stewardship, and the surrounding communities. Though, how does the gas verification process work? That’s where independent auditors come into the picture.
RSG Standards: The Role of Independent Auditors
For the environmental, social, and governance impact of RSG to be realized, natural gas molecules must first be verified by independent auditors. Since the first certification in 2018 up until December 2021, it is believed there have been 10-20 RSG deals made by the North American natural gas industry. However, for RSG to become verified, it first must pass one of the three established RSG certification standards:
- Project Canary’s TrustWell: This certification looks at over 600 data points that fall into 24 operational categories. Once the audit is complete, TrustWell awards natural gas molecules a quality ranking: Platinum, Gold, Silver, or Rated. With a primary focus on methane emissions, TrustWell further delivers specific metrics that RSG end-users can leverage for ESG reporting.
- Equitable Origin’s EO100: Of these three verification standards, EO100 is the most qualitative – reporting on working conditions, climate and biodiversity, fair labor, Indigenous People’s rights, corporate governance and ethics, and beyond. However, EO100 does not have the capability to measure or report on methane-related emissions. For that reason, Equitable Origin often partners with MiQ on natural gas related projects.
- The MiQ Standard: This certification was formed in partnership between RMI (the Rocky Mountain Institute) and SYSTEMIQ. MiQ is an internationally applicable system that verifies the associated methane emissions resulting from natural gas. After the comprehensive assessment is complete, MiQ will award RSG a letter grade – quantifying the gas’ methane intensity (MI).
These standards enable organizations to benefit from more comprehensive monitoring and measuring of emission levels and sustainable practices. By working with auditors on RSG verification, end-users can confidently share their gas’ ESG impact – thanks to certifications that ensure conformity and transparency.
Natural Gas End Users: A Market for RSG
Natural gas has the second-highest consumption rate in the United States – only preceded by petroleum. In 2020, the United States exported natural gas to roughly 32 countries that were seeking affordable options for electricity, heating, cooling, and transportation. There’s no doubt in the coming years that more organizations will begin to prioritize sustainability alongside, if not above, financials. Currently, EQT Resources, Northeast Natural Energy, Chesapeake Energy, Seneca Resources, and Southwestern Energy – among others – have announced their participation in at least one of the RSG standards.
With more end-users prioritizing information transparency for gas production, RSG can serve as that bridge energy source between conventionally sourced fossil natural gas and the renewable markets – particularly renewable natural gas (RNG). While most organizations and utilities are in their infancy for defining sustainability goals, as they’re faced with more aggressive emission reduction targets, whether from internal stakeholders or federal regulations, it’s likely RNG will become the front runner – unveiling a carbon negative, drop-in solution to both natural gas and RSG.
While RSG is a fairly new concept to the natural gas industry, conversations relative to sustainability are not. Stakeholders and market experts have been evaluating how new technology and reporting standards can be integrated strategically – helping decarbonize the industry and facilitate achievement of net zero-emission targets. To learn just how conventional natural gas, RSG, and RNG stack up against one another, reach out!