Energized ESG. PureWest Announces First Carbon Neutral Responsibly Sourced Gas

Yesterday, PureWest, an independent natural gas producer with operations in the Rocky Mountain region, planted its flag at the forefront of the ESG movement in oil and gas.

Beyond using Project Canary to perform the TrustWell certification of their production, PureWest also purchased carbon offsets for their scope 1 and scope 2 emissions on two select facilities to offer truly carbon-neutral Responsibly Sourced Gas. 

What Does This Mean?

When a company undergoes the Project Canary TrustWell certification process on their assets, they receive two notable metrics:

1. TrustWell Performance Environmental Performance Score and associated ranking:
2. The Project Canary TrustWell Performance score and associated ranking (Rated, Silver, Gold, Platinum) is a general indicator of how effectively a company mitigates the environmental risks related to its area of operations.
3. PureWest received a Platinum ranking on 90 of its wells on the two pads. This indicates that Pure West is using the best practices available to the industry to reduce its environmental impact.
4. Low Methane Verified Attribute: As part of the TrustWell process, Project Canary’s Certification Engineers independently evaluate a methane intensity score for the operator. A company’s methane intensity refers to the amount of methane leaked or released into the atmosphere compared to the total volume of methane that was pulled out of the ground.
5. PureWest’s 2019 methane intensity rate was 0.12% based on data reported to the EPA, which means that 0.12% of the methane that PureWest pulled from the ground in 2019 was released into the atmosphere before it was transported to an end-user of the gas. For 2020, PureWest estimated that methane intensity at 0.04%, which acts as the basis for the emissions offset under the deal. Project Canary has not yet seen feedback from the EPA to verify this rate.

Project Canary has independently assessed PureWest as a Platinum Operator of those 90 wells. Additionally, Project Canary confirmed PureWest’s 2019 methane intensity was at 0.12%. Using the 2020 methane intensity of 0.04%, PureWest procured the carbon offsets necessary to make a specific volume of gas off of these pads carbon neutral for the course of the year. 

If the production from those pads for the year is 100 million cubic feet of gas, then PureWest has purchased enough offsets for 40 thousand cubic feet of gas. Therefore, purchasers of the gas can purchase the volumes of Certified Responsibly Sourced Gas and the option to “retire” the offsets that PureWest procured. This means that the end buyer will know they bought gas with a net neutral impact on the climate due to emissions and will have confidence from the Project Canary TrustWell Certification that the gas was produced in the most environmentally responsible manner possible.

Key Takeaways

1. Responsibly-Sourced Gas can now be sold as estimated Carbon Neutral. As the industry thinks through a pragmatic path forward through an energy transition, we can rely on natural gas for baseload power without having a detrimental impact on the environment in relation to emissions.
2. Companies that want to differentiate themselves will need to follow suit and look at opportunities to be a net-zero company. Independent certification of upstream oil and gas operations is a need to have for ESG minded companies. 
3. Project Canary is the preeminent certifying body for net neutral responsibly sourced gas transactions.
4. ESG has arrived, and you cannot claim net-zero based on estimations. Accurate measurement is critical when it comes to credibility. As with financials, estimates and actuals are far from the same thing.
5. The ability to accurately measure emissions provides concrete data to power your ESG reports, finance documents, PR and marketing strategy, and prove your environmental performance without a shadow of a doubt.

Future Opportunities

1. For this deal, the EPA’s Subpart W component-based emission factors were used to determine the methane intensity for PureWest. In the future, Project Canary’s high-fidelity continuous monitoring hardware will be used to develop a more accurate, more credible pad-level methane intensity metric. 
2. This means that companies won’t have to rely on estimates that are known to be wildly inaccurate telling them how many offsets they need to buy. Instead, they can install Project Canary technology that accurately tells them the correct amount of credits they need to procure.
3. Markets such as California and RGGI in the northeast are undertaking CO2 accounting to reduce the net carbon footprint of gas by up to 20%.
4. This will lead to a genuine economic and price differential for net-zero scope 1 and scope 2 gas. Carbon economics dictate that gas with a 20% lower carbon footprint should trade at a premium.
5. Consumer choice for where they are buying their energy-intensive products (food, wearables, packaged goods) and the energy coming to their homes from Utility companies.