Differentiated Natural Gas: A Show of Transparency
Differentiated natural gas provides an opportunity for the oil and gas industry to join the low-carbon economy and gain market share
September 9, 2022
By: Angelique Giraud & Lauren Sion
Oil and gas in the energy transition
The energy transition is here. While our increasingly climate-conscious world may initially appear as a threat to the oil and gas industry, in reality it provides a market opportunity on which the industry can capitalize. However, declaring net zero goals is not enough to differentiate your product and maximize market share; emission reduction claims require action and evidence. Continuing with practices lacking transparency, which have often been the status quo, risks asset value. By modifying operations and the approach to emissions measurement, the oil and gas industry can be a key player in the transition to a low-carbon economy while also avoiding the future risk of potentially stranded high methane intensity assets, therefore retaining the value of its investments.
Recently the Environmental Defense Fund (EDF) released a white paper addressing the merits of a strong and meaningful differentiated natural gas program. Montrose Environmental Group, Inc. (Montrose) has direct experience with multiple voluntary natural gas certification programs and frameworks; although it is a relatively new concept, we believe the role of differentiated natural gas in the low-carbon energy transition will continue to expand. These programs provide oil and gas companies with an opportunity to significantly reduce their climate impact through methane measurement and mitigation. Differentiated natural gas also can act as a market signal within the industry, as customers demand low-carbon alternatives. Montrose can support you in selecting and implementing a program that is not only credible but also the best fit for your operations.
Differentiated natural gas: What it means and why it matters
Differentiated gas, also referred to as certified gas or responsibly sourced gas, is natural gas which has been produced in a manner that minimizes methane emissions (consistent with society’s need to address the climate crisis) and has undergone a third-party review confirming that certain relevant standards are met. Currently there are several programs available for certifying natural gas. These certification programs provide an opportunity for oil and gas companies to avoid greenwashing in their methane mitigation efforts by leveraging comprehensive and accurate emissions monitoring and transparent reporting; however, navigating this process is not always straightforward.
Methane is a greenhouse gas (GHG) with a high global warming potential that can be released unintentionally or routinely vented throughout the value chain. The oil and gas industry is massive, and the equipment that produces and transports gas is complex. Legacy technology and equipment were developed on an assumption that there are an abundance of energy resources and without the understanding that methane has an outsized impact on climate change. Across the oil and gas industry, methane emissions are typically estimated using general published emission factors that assume each piece of equipment releases a uniform amount of methane in a given year. However, as our understanding of climate change has progressed, technology to detect and measure GHGs has similarly advanced.
Satellites, drones, optical gas imaging, and continuous monitoring allow methane and other GHG emissions to be identified and quantified – often without the need to set foot in the field. With this direct measurement technology becoming more widely available, it is clear that industry estimates of GHG emissions are often extremely inaccurate; a 2015 study reported that U.S. oil and gas industry emissions were up to 60% higher than USEPA reporting indicated.
There is, therefore, an opportunity to get on the right track – and the time is now. There are several programs that provide transparent certification of responsibly sourced natural gas, including MiQ, Equitable Origin, and the Oil and Gas Methane Partnership 2.0 (OGMP 2.0). Below we dive into the details of OGMP 2.0, outlining what this framework involves, the benefits that it provides oil and gas companies, and how Montrose can provide support and experience with these programs to differentiate your gas.
Partnering with OGMP 2.0: A framework communities can trust
OGMP 2.0, noted in the EDF white paper as a high-integrity monitoring and reporting framework, provides an in-depth methodology for companies to more accurately measure emissions and transparently report them, while also committing to emissions reductions. This multi-stakeholder initiative, launched by UN Environment Programme (UNEP) and the Climate and Clean Air Coalition, outlines methane emissions measurement and reporting requirements for the oil and gas industry at both the source- and site-level, combining bottom-up and top-down approaches to include direct quantification of methane emissions and thus move away from the use of inaccurate emission factors and estimates. OGMP 2.0 is more than just a reporting framework; it also provides a community of practice for like-minded companies to share experiences regarding methane quantification during periodic collaborative working sessions.
Companies interested in joining OGMP 2.0 sign a Memorandum of Understanding (MoU) with the UNEP, committing to the OGMP 2.0 framework. Once the MOU is signed, member companies work to set methane reduction targets, develop implementation plans to achieve OGMP’s Gold Standard within three to five years, and report actual methane emissions from all material sources (both operated and non-operated assets) on an annual basis. Gold Standard reporting indicates that measurement-based, source-level emission data are reconciled with independent site-level measurements, typically from fixed-base sensors, verifying data integrity. There is no fee to join OGMP 2.0.
Committing to a responsibly sourced gas certification program or framework such as OGMP 2.0 shows the highest commitment to transparently and accurately measuring and reporting actual methane emissions, as well as a commitment to emissions reduction. Differentiating natural gas sets your product apart, helping to maintain and grow market share through the low-carbon energy transition. Certifications such as OGMP 2.0 take time to achieve; timely action will allow your company to capture and benefit from this opportunity to give you a value proposition over competitors.
The Montrose difference
Montrose supports oil and gas companies of all sizes with developing, and implementing, strategies to transparently and accurately measure, reduce, and report methane and other GHG emissions. We have experience assisting companies wishing to differentiate their natural gas, whether through OGMP 2.0 or one of the other available frameworks. We actively guide our clients through each step, from applying for certification and developing implementation plans, through to planning campaigns for direct measurement of methane emissions and providing the technology and resources to complete those campaigns. We possess in-house measurement technology and boots-on-the-ground expertise to take an accurate snapshot of emissions and develop robust plans to reduce emissions, increase efficiencies, and decrease a company’s impact on climate change. In addition, Montrose has critical experience with continuous monitoring technology to provide the integrated measurement required by OGMP 2.0. This full-service capability is unique to Montrose, and we pride ourselves on our ability to demystify and support execution of the full certification process and lifecycle.
How do I get started?
We are eager to support you in taking the next step to meet the demands of the low-carbon energy transition. From strategy development and project management, to direct GHG emissions measurement in the field, including leak detection and repair (LDAR) and continuous emissions monitoring, we have you covered.
Montrose’s robust oil and gas team is composed of expert environmental professionals and experienced field technicians with decades of relevant industry experience. We can partner with you to help you accurately measure your methane emissions, achieve your emissions reduction goals, and receive recognition for your efforts via a natural gas certification program. For more information, please reach out – we’d love to listen to your challenges and help you come up with a fit-for-purpose solution for your organization.
 Assessment of methane emissions from the U.S. oil and gas supply chain https://www.science.org/doi/10.1126/science.aar7204?siteid=sci&keytype=ref&ijkey=42lcrJ%2FvdyyZA
Angelique Giraud – Environmental Research Analyst
401.680.2158 | firstname.lastname@example.org
Angelique is a resource economist with 10 years of experience in diverse environmental settings. She maintains advanced knowledge of quantitative and qualitative research methods to evaluate and develop market and policy strategy for businesses and government. Her broad resource management and conservation experience range from the energy industry, water resources, climate change mitigation, carbon sequestration, waste management, and wetland ecology. In the energy industry, Angelique has worked on state-of-the-art renewable energy facilities and recently in the oil and gas sector she focuses on following the changing regulatory and voluntary reporting landscape for methane emissions. Angelique’s water resource experience began in the eastern U.S. addressing challenges of water quality, flooding, drought, impacts of sea-level rise, wetland conservation, and water storage. Her work in the western U.S. dealt with issues caused by severe drought, wildfires, the resulting impacts on local industries and communities, and navigating the complex western water laws. She supported efforts to provide decision-makers with the latest research to plan for increasingly limited water resources caused by climate change.
Lauren Sion – Project Manager
724.288.4787 | email@example.com
Lauren is a client-focused Project Manager with over 5 years of experience in environmental compliance, environmental, social, governance (ESG), and sustainability. She is responsible for performing and managing technical projects across the U.S, including regulatory compliance and voluntary programs to benchmark greenhouse gas (GHG) emissions, assess and implement emission reduction opportunities, and manage energy savings and renewable energy projects. She manages and collaborates on projects with a focus on sustainability including net-zero goals and Science Based Targets (SBT). She completes site visits and assists in the preparation of plans, reports, and presentations for clients in the oil and gas, chemical, and manufacturing sectors.