The natural gas industry continues to demonstrate environmental leadership though Certified Natural Gas pilot projects. This leadership positions Canada with the lowest emissions gas molecule in the world, offering both domestic GHG emissions reductions and a platform for a robust LNG export industry to meet rising global natural gas demand.
The number of certified sites has grown to 10, with five sites located in Canada and another five located in the United States.
Source: Canadian Gas Association
WHAT IS CERTIFIED NATURAL GAS: Certified Natural Gas (certified gas or CG) is natural gas that has been produced to meet a specified set of standards and practices. While there is no universal definition for CG, there are several certification standards entering the market including Equitable Origin 100, MiQ, and Project Canary’s Trustwell. While these certification standards vary in their criteria, they include a wide range of environmental, social, and governance criteria. More specifically, these certification standards encompass emissions management and emissions reductions as a core performance metric in the certification process.
THE CERTIFIED GAS MARKET IN NORTH AMERICA: The market for certified gas has been growing rapidly in recent years. In 2019, Equitable Origin certified its first site, the Kakwa River project owned by Arc Resources. Since then, the number of certified sites has grown to 10, with five sites located in Canada and another five located in the United States. When we broaden the scope to other types of certification, S&P Global estimates that 14% of total US gas production will have received some form of certification by the start of 20221.
CERTIFIED GAS COSTS: Producers that certify their gas often obtain a premium for their product. Though the market is still being established, the estimated incremental cost of certified gas ranges between $0.05 to $0.50 per GJ. At current market prices for natural gas, this equates to a one to eight per cent increase in the commodity prices of natural gas. The cost per tonne of CG ranges from $15-140 per tonne of CO2.
CERTIFIED GAS ENVIRONMENTAL PERFORMANCE: Producers seeking certification make design or operating changes to their facilities to achieve the necessary emission reductions. These can come in many forms such as water reclamation/recycling, fuel switching, and methane emissions management through the implementation of more comprehensive leak detection and repair programs. The act of achieving certification produces real and tangible emission reductions. Under the MiQ standard, reducing the methane intensity from 1.0% to 0.2% (a Grade E certification to a Grade C certification) would result in a reduction of approximately 3.5 kg CO2/GJ. Applying such a reduction across all Canadian production would result in an annual reduction of 23.5 MT of CO2, equivalent to removing 5.1 million passenger vehicles off the road.
1 S&P Global (2021). Certified natural gas: Midstream sector begins embracing concept, standards. Retrieved from https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/natural-gas/101421-certified-natural-gas-midstream-sector-begins-embracing-concept-standards