Certifying Natural gas for Methane Emissions Management: Insights into MiQ Framework
In the ever-evolving realm of the oil and gas industry, sustainability has become a focal point, with a surge in voluntary initiatives aiming for net-zero objectives [1]. Within these initiatives, third-party certifications such as MiQ, Project Canary—TrustWell, and Equitable Origin—EO100 are some of the growing frameworks under the certification system to differentiate the natural gas market and promote responsible energy production [1]. Some of the key differences between these certifications are summarized in Table 1 [1].
Table 1: Comparison of certification programs [1]
In this article, we delve into the MiQ certification, its operational framework, and its significance for both buyers and producers.
About MiQ
MiQ, which is shorthand for Methane Intelligence, is a global, non-profit organization launched in 2020[1]. MiQ’s main goal is to speed up the reduction of methane emissions in the oil and gas industries [2]. As explained in MiQ webinars [2] and [3], it achieves this by creating a differentiated natural gas market for both buyers and sellers using its MiQ Standard certification process.
Think of the MiQ Standard as a kind of rulebook that independent auditors use to evaluate how well a producer or facility manages methane emissions throughout their operations and give out grades for a natural gas based on the methane performance [2]. One of the key aspects of MiQ is an open-source approach; third-party experts, independent from MiQ, oil and gas companies, and technology providers, are responsible for evaluating and providing audit reports to understand the company’s emissions. This covers everything from the initial gas extraction at the wellhead to the processing of liquefied natural gas [3].
For producer companies, the certification process typically spans one to three months [4]. Following a third-party audit and subsequent certification, the facility seamlessly integrates into the MiQ digital registry. Subsequently, on a monthly basis, MiQ issues certificates for the produced gas, enabling operators to market the gas alongside its certification [4]. More detailed documentation on the Auditor’s Process and various MiQ standards can be found at MiQ Standards [5].
The aim of the MiQ certification process is to increase transparency when it comes to managing methane emissions [2]. As mentioned in article [6], certification provides a market mechanism that incentivizes methane reduction, which enables the worldwide community to legitimately distinguish between gas types depending on their methane emissions performance. The goal of MiQ is to establish a market where certified natural gas may be exchanged like other traditional commodities, which will ultimately provide incentives to reduce methane emissions everywhere.
With the aim to expand its framework globally [3], MiQ already started working with well-known operator companies like Repsol, BP, ExxonMobil, Chesapeake Energy, EQT, and others have certified many of their facilities with the MiQ Standard in the United States market [7]. While EO certification has gained notable adoption in both the US and Canada for ESG purposes, MiQ, being a newer entrant since its launch in 2020, has not reached significant penetration in the Canadian market yet as per our research. It's worth noting that there is a partnership between MiQ and EO. Given EO's established presence, companies in the US have been observed jointly obtaining EO and MiQ certifications, particularly as EO's coverage of methane emissions may not be as detailed.
MiQ emphasizes the ongoing efforts to develop the standard in a manner that ensures acceptance by regulators for global applicability [2][3]. Presently, companies are opting into this initiative voluntarily. It's crucial to note that these certificates, while not official endorsements from government agencies, symbolize collaborative partnerships among stakeholders [1]. Their primary purpose is to streamline the transaction of low-emission gas.
The Methane Challenge and Opportunity
Methane, the main component of natural gas, will continue to power our energy systems for example, a 25% increase in natural gas electricity generation is projected by the International Energy Agency (IEA) by 2050 [8]. However, methane is over 80 times more potent than CO2 in climate terms over a 20-year span [8].
Figure 1: GHG Impact over Time for Methane [8]
Figure 2: O&G Hotspots: Methane emissions [9]
The global oil and gas industry is a major methane emitter, releasing over 80 million tonnes of methane annually – equivalent to 7 billion tonnes of CO2e [9] which is equivalent to all the CO2 emissions from the world’s cars and trucks [10].
Methane emissions, unlike CO2 are nearly exclusively Scope 1 emissions from the operations of oil and gas corporations. The upstream segment, or onshore and offshore oil and gas production, is responsible for over 80% of the oil and gas sector's methane emissions [11].
According to the International Energy Agency, a substantial 75% of methane gas emissions can be reduced with available technology by 2030 [11]. As explained in [11], this reduction would result in a remarkable 5.7 gigatons of CO2e reduction [11]. This reduction alone accounts for a significant 17% of our global annual greenhouse gas emission reduction target, comparable to removing 1.2 billion polluting cars from the roads by 2030. To put things into perspective, high-profile innovations like electric vehicles are expected to reduce global CO2e emissions by just 0.5 gigatons by 2030 at best [11]. Notably, some of these reductions could even turn a profit by capturing leaked methane gas during production.
In short, mitigating methane emissions is an urgent challenge and unlike CO2, addressing methane reduction is a more cost-effective strategy to combat climate change faster.
MiQ Framework
As mentioned in the MiQ standard report [12], Highly qualified third-party auditors use the MiQ Standard to regularly assess and grade methane emissions at certified facilities on a scale from A to F, ensuring ongoing compliance. These evaluations lead to the issuance of monthly MiQ certificates, providing credible proof of emissions for gas traded among sellers, traders, and buyers. To attain a specific grade, facilities must surpass the minimum requirements in all 3 categories outlined in the Standard. The overall certificate grade is the lowest grade of the three certificate pillars.
Figure 3: MiQ Framework: Grading Structure for the MiQ Onshore Production Standard v1.0 [12]
Methane Intensity
Methane intensity is a quantitative measure of methane emissions relative to natural gas production. It serves as a baseline indicator of a facility's methane emission performance, highlighting whether the facility's design and work practices minimize inherent methane emissions and reduce the risk of fugitive emissions.
To enhance the robustness of the MiQ Standard, Monitoring Technology Deployment and Company Practices play a pivotal role by introducing a qualitative dimension to the assessment process, complementing the quantitative evaluation of methane intensity.
Monitoring Technology Deployment
The MiQ Standard requires companies to use monitoring technology to detect and quickly fix any unintended methane leaks. There are two levels of checks: one that looks at individual parts of the equipment, and the other that checks the entire facility. By doing these checks regularly and covering different areas, they significantly increase the probability that even the smallest leaks as well as the bigger problems get spotted and fixed. This comprehensive approach makes managing methane emissions more effective and reliable.
Company Practices
The MiQ Standard defines certain essential practices that companies must follow to qualify for MiQ Certification. It also suggests additional, more advanced policies and procedures that, while not obligatory, are required for achieving higher MiQ Certification levels. To be eligible for MiQ Certification, a company must be able to provide proof of their established practices and demonstrate that their teams understand and effectively put these practices into action. More details on this can be found at the MiQ standard updates webinar on its website [13].
Figure 5: Company Practices Overview [13]
Advantages of Certification
As discussed during one of the MiQ webinars [14], [2] and [3], some of the key points that show the value addition that can be achieved through the MiQ certification ecosystem are as follows.
1. Distinguishing Performance
Certified companies stand out as performers in methane emissions reduction, while uncertified ones may be seen as having poor methane performance.
2. Stakeholder Engagement
Certification efforts engage stakeholders and encourage producers to take active measures to reduce methane emissions.
3. Third-Party Outlook
Businesses must have strong methane mitigation strategies, technology, and a detailed understanding of the sources of methane emissions in order to effectively manage the problems [2]. Independent third-party audits and reports help companies plan and implement emissions reduction initiatives with credibility.
4. Accelerating Industry Efforts and to be compatible with existing and future voluntary actions [9]
Inclusive agreements and global best practices are already in place alongside the MiQ Standard. As technologies advance, the Standard will raise the technical standards for measuring methane emissions, including compliance with OGMP 2.0 Levels 4 and 5. Certification acts as a driver for the industry to accelerate emissions reduction efforts with developing technologies, alongside regulatory requirements.
5. Transparency in Trade and Global market access
Certification promotes transparency in gas trade, ensuring that buyers and sellers can trust the emissions data. Also, The Registry serves as the exclusive source of information for MiQ Certification and will increase the market for certified gas by allowing businesses to trade it on an exchange and allowing buyers to deal in certified gas. MiQ Certificates are worldwide tradeable, guaranteeing optimal liquidity and compliance with current gas market procedures [15].
6. Cost-Effective Emissions Reduction
When considering other options, certified gas is a more affordable option for purchasers of natural gas to lower their Scope 3 emissions [16]. As per the MiQ webinar [13] “on certified gas for buyers”, buyers can claim environmental attributes of certified gas usage. In ESG reporting, it can be used as a backup documentation for all claims made relative to emissions.
About Process Ecology
We understand that methane emissions and their reduction are top concerns for businesses across the oil and gas industry. At Process Ecology, we are dedicated to helping you tackle these challenges head-on. Explore our Emissions Advisor system, a comprehensive solution designed to simplify emissions tracking and reporting, ensuring compliance with regulatory requirements. Discover how our expertise in process engineering, emissions estimation, and optimization can drive sustainability and efficiency in your operations. Contact us today to learn more about the value we can uncover together and embark on your journey towards a greener, more efficient future.
Don't hesitate to get in touch with our team of experts for any questions or assistance regarding your methane emissions, emissions reduction, and air emissions reporting needs. Together, we can make a significant impact on your sustainability goals.
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References:
[1] S. Garg, D. E. Boz, B. Gilbert, and J. Crompton, “A critical review of natural gas emissions certification in the United States,” Environmental Research Letters, vol. 18, no. 2, p. 023002, Feb. 2023, doi: 10.1088/1748-9326/acb4af.
[2] Gas Pathways, “Independent Certified Gas with Equitable Origin and MiQ,” https://www.youtube.com/watch
[3] MiQ, “MiQ Webinar: Green finance, Methane, and the Clean Energy Transition,” https://www.youtube.com/watch
[4] “Understanding Certified Gas with Georges Tijbosch | Bridger Photonics.” https://www.bridgerphotonics.com/blog/certified-gas-georges-tijbosch-miq
[5] MiQ : Methane Intelligence, “Documents - MIQ,” MiQ. https://miq.org/documents/?cat=miqstandards-2
[6] “CF Industries announces purchase of Certified natural gas,” CF Industries. https://www.cfindustries.com/newsroom/2023/bp-certified-natural-gas
[7] MiQ : Methane Intelligence, “Participants - MIQ,” MiQ, Sep. 16, 2022. https://miq.org/participants/
[8] S. Asgarpour and P. Eng, “PTAC Methane Detection and Mitigation Initiatives Report.” Available: https://www.ptac.org/wp-content/uploads/2021/12/PTAC-Methane-Detection-Mitigation-Initiatives-Report-v2.pdf
[9] “Certification and Methane Emissions in EU Import Regulations,” MiQ. https://miq.org/thoughtleadership/certification-and-methane-emissions-in-eu-import-regulations/
[10] “Home,” MiQ. https://miq.org/
[11] “Halving greenhouse gas emissions by 2030 – let’s start by tackling methane emissions,” MiQ. https://miq.org/thought-leadership/halving-greenhouse-gas-emissions-by-2030-lets-start-bytackling-methane-emissions/
[12] “MiQ STANDARD for Methane Emissions Performance Introduction for Auditors.” Available: https://miq.org/document/miq-introduction-for-auditors/
[13] “Webinars,” MiQ. https://miq.org/webinars/
[14] “MiQ Webinar: Differentiating the Global Gas Market,” www.youtube.com. https://www.youtube.com/
[15] MiQ : Methane Intelligence, “Essential Elements: Why MiQ’s certification is the regulator’s best option - MiQ,” MiQ, Oct. 23, 2023. https://miq.org/thought-leadership/essential-elements-whymiqs-certification-is-the-regulators-best-option/
[16] “In conversation with... Georges Tijbosch, CEO of MIQ,” HC Group, Feb. 28, 2023. https://www.hcgroup.global/hc-insider/leadership-thoughts/in-conversation-with-georges-tijboschceo-of-miq
