Not all gas molecules are the same – environmental performance factors should be measured, tracked, and reported.
What is RSG?
Responsibly-Sourced Gas (RSG), or Certified Gas is natural gas that has undergone independent third party certification where molecules were produced under specified best practices for methane mitigation. One method for example, low methane certified gas, as well as other best practices around minimizing environmental and community impacts. This is important in this time as operators and buyers are seeking to differentiate molecules in response to market, community, and regulatory pressures.
RSG can serve as an essential component of decarbonization and energy transition strategies. This helps to address the trilemma need for energy security, access to affordable energy, and cleaner commodities. RSG is assessed by a third party with its emissions (CH4, GHGs, and CO2e) profile measured and impact on other vital environmental categories (water and more) scored. While several variations of certified gas have emerged, Premium RSG is attained through continuous (24x7) emissions monitoring, measured (e.g. quantified) methane emissions plus a Project Canary TrustWell® certification which includes a dynamic environmental score related to air, water, land, and community impacts. Other common acronyms besides RSG include Certified Low Methane Gas, Certified Gas, Differentiated Gas, Producer Certified Gas, Independently Certified Gas, and Next-Gen Gas.
The RSG framework permits producers and operators to differentiate and independently validate their environmental performance on a measured, granular, well-by-well basis. Certified Responsibly Sourced Gas enables buyers to select gas supplies that meet their specific ecological standards by measuring and verifying various environmental attributes of their gas supply chain.
Methane leaks occur across the energy supply chain with much greater prevalence than historically estimated and reported. The market also recognizes that methane contributes as much as 86x the global warming potential (GWP) as CO2. Growing scientific evidence also indicates that methane leaks are highly intermittent, not just from super emitters. Over 50% of supply chain emission sources can be attributed to intermittent, preventable events. Gas production facilities are complex and require continuous (24x7, minute by minute) high-fidelity emissions monitoring devices and reporting structures to truly know how they perform at any point in time and over time.
A digital canopy of ground-based continuous monitoring of high-volume facilities combined with satellite assessments or fly-overs of low-volume assets is required to accurately measure and report methane emissions- estimates and extrapolations are no longer enough.
...GHG inventories being maintained by the Federal government are drastically underestimating the amount of methane being emitted…
Source: Kayrros ‘full inversion’, EPA, BloombergNEF, study on US oil & gas assets
Top-Down Uncertainty When considering top-down estimates, it is important to understand levels of uncertainty associated with different measurement technologies and to understand how emissions or leak rates from observed sites are extrapolated across unobserved sites and broader geographic areas. Source: ceres.org
Scientific studies have shown that the best available measured or actual emissions data (not estimated emission factors) indicated that industry average methane emissions are 60% higher than reported. As methane is 84x worse, reducing these emissions by 80%+ would have an immediate and significant reduction in GHGs and GWP. Certified Gas or RSG accomplishes this by setting the criteria that the actual measured methane intensity of the gas at the wellhead is below 0.20%, as verified by independent 3rd parties. This low methane intensity attribute compares to estimates of methane intensity levels in excess of 2% or more.
Why Responsibly Sourced or Certified Gas is Different
- Use buying power: Reduce methane emissions and other environmental impacts.
- Meet environmental goals: RSG undergoes independent, 3rd-Party scrutiny, assessments, and verification.
- Measure methane intensity (don’t estimate): Top-tier RSG is continuously monitored to measure methane intensity from the bottom-up on every facility versus estimates.
- Change through verified environmental attributes: methane, low water usage, safety, seismic, land, and community impacts.
- Available now: large volumes of certified gas are available in most US markets and growing quickly now that buyers have noticed. Enverus Intelligence Research projects supply of producer-certified RSG to grow from 8.7 Bcf/d in 2021 to more than 20 Bcf/d by the end of 2022 based on announced projects, or roughly 18% of the North American market.
What Are Market Standards for Certified Gas?
With independent, verified data, buyers can set the standards for the environmental attributes they seek. OGMP 2.0, S&P Platts, GAO, and others have all recently developed criteria for the markets to consider. OGMP 2.0 targets methane intensity levels of 0.20%. S&P Platts sets their standard at 0.10%. Both specify that facility level and measured methane intensities are required. Estimates and outdated emission factors are not enough. S&P discusses the benefit of having more than just low methane standards and suggests that ultimately other environmental and community impacts, such as water usage, will be measured and scored. Below is a comparison of how Project Canary meets or exceeds the evolving standards.
Evolving Standards for Certified Gas
Certification should require and verify that best practice work practice standards are met.
✓ Project Canary differentiates operators on best practices across their operations in all key areas.
✓ Project Canary went further and expanded this to include water, safety, and engineering design best practices.
Certification must be based on high-integrity monitoring and reporting consistent with Oil and Gas Methane Partnership (OGMP) 2.0 Level 5.
✓ Project Canary provides a complete overview of emissions across the entire site while gathering and presenting data in a demonstrably credible and transparent way through our Continuous Monitoring Dashboard.
✓ Project Canary’s approach exceeds OGMP 2.0 Level 5 as continuous monitoring or enhanced monitoring is required at all facilities producing RSG (e.g., no estimates).
✓ Project Canary’s laser spectroscopy sensors provide the most granular level of monitoring thus the highest level of measurement / quantification available.
Certification must be accompanied by verification from a credible and independent third party.
✓ Project Canary is a credible and independent third party and retains ownership of all sensors to ensure accuracy and performance.
✓ Project Canary partners with academic universities like Colorado School of Mines for air and Colorado State University for water to ensure emissions and water data are vetted through a credible third-party source.
✓ All Project Canary TrustWell engineers have engineering degrees (Petroleum, Mechanical, Chemical, or Environmental) and have experience working in the energy sector.
✓ Project Canary Performance Proof provides independent data integrity audits from a Big-Four accounting firm and can provide SOC-1 compliant and auditable data.
Certification must be based on an intensity standard that is no greater than the Oil and Gas Climate Initiative’s (OGCI) metric of 0.20% and declines over time.
✓ Three years ago, Project Canary set our benchmark at 0.28%, given the guidance from ONE Future and their 2025 target.
✓ Project Canary is updating our low methane intensity cut-off to 0.20%, and our solutions measure this level continuously through time to drive further improvement.
Companies seeking certification must specify which of their assets they are certifying, the share these assets represent relative to their entire portfolio, and the emissions intensity of the certified assets. In addition, companies seeking certification must report a company-wide emissions intensity.
✓ Project Canary measures and can identify the methane intensity at each specific production pad, e.g., the exact source of the molecule.
✓ Project Canary has both basin-wide emissions intensity requirements and pad level requirements around continuous monitoring, ensuring that responsibility is addressed for company-wide operations.
✓ Project Canary TrustWell reviews policy, plan, and execution criteria addressing company-wide programs as part of the policy review.
✓ We are committed to working with producers to certify their operations on a well-by-well and pad-level basis so that they can have the confidence in their operations and guarantee the associated environmental attributes to their buyers (e.g. utilities, commercial and industrial buyers, or LNG purchasers).
✓ We work with Producers to develop roadmaps to expand monitoring and measurement capabilities across their portfolios and reduce methane emissions across the entire fleet of assets over time. Multiple leaders in the RSG market have pledged to assess and certify 100% of their wells.
How Does Project Canary Certify?
- Project Canary performs rigorous (600+ factors) environmental and operational assessments at the facility level, including site visits.
- Project Canary installs state-of-the-art high fidelity continuous monitoring sensors at each pad or facility.
- Project Canary issues a facility-level certificate and score along with a facility-level methane intensity measure.
- Project Canary does not make money trading RSG or benefit from higher volumes of RSG. We are a B-Corp that receives a monthly fee for the services and solutions we provide, much like an audit firm.
Demonstrate ESG commitments with trusted, verifiable data.
Today, environmental reporting of emissions and air quality is based on outdated approaches with wide degrees of variability and accuracy. Status quo top-down evaluations of operations lack granularity and an independent, rigorous, and holistic review of risk and integrity. Project Canary Certification, combined with continuous monitoring, gives operators empirical data from actual operations, making ESG reporting verifiable and allowing for the development of go-to-market RSG. We provide SOC-1 compliant and audible data.
Capitalize on RSG markets.
The RSG market allows companies to sell gas with verified environmental attributes and often realize a premium price on a certified responsibly produced commodity to meet increasing demands from investors, regulators, and buyers. Buyers are increasingly discriminant with natural gas purchases; partnering with Project Canary will ensure access to certified gas markets.
Attract and retain long-term investors.
Investors are approaching the energy sector with caution. Trusted, independently collected, and managed environmental data provides investors the confidence they need to evaluate and validate environmental performance.
Optimize operational assets.
Real-time emissions data give operations personnel the information they need to quickly detect, locate, and fix leaks. Reducing fugitive emissions allows operators to improve performance and capitalize on a product that would have otherwise leaked into the atmosphere. You can now accurately measure your methane emissions minute by minute instead of estimating them monthly. Bottom-up matters now more than ever.
Reduce the cost of capital.
Lenders are assessing environmental performance in their risk and pricing analyses. ESG factors are increasingly included in loan covenants. Evidencing strong environmental performance using trusted, independent data can help reduce the cost of capital and allow you access to sustainability-linked lending.