S&P Global to begin publishing US methane intensity calculations, associated premiums

S&P Global Commodity Insights has begun publishing satellite-driven methane intensity calculations and associated pricing premiums to lower methane output for 19 US producing regions across the US on April 1.

The production and transportation of natural gas, often touted as an alternative to coal or oil, can emit large volumes of methane -- a substantially more potent greenhouse gas (GHG) than carbon dioxide.

Historically, the volume of methane emitted through the production and transport of fossil fuel-derived natural gas has been notoriously difficult to measure, however, improved monitoring technology over the last several years has made it possible to get a much stronger picture of the real volume of methane intensity of specific activities.

The methane intensity of natural gas production is calculated by looking at the volume of methane emitted as a percentage of total production and is one of the primary ways of measuring the GHG impact of the natural gas production process.

S&P Global's methane intensity calculations use daily methane concentration data collected by the Copernicus Sentinel 5P satellite to more accurately gauge the methane emissions rate from 19 US natural gas production basins and will be calculated by S&P Global's Analytics on a monthly cadence.

This process reflects a more accurate rate of methane emissions within these producing regions and can differ from self-reported data or real-time monitoring processes for individual projects within these regions. S&P Global has focused its satellite model directly on the oil and gas producing facilities within each production basin to get the most accurate picture of the methane emissions rate generated by the US natural gas industry.

However, because methane emissions are often a by-product of numerous other industries -- including power generation, mining, and agriculture -- and methane disperses within the atmosphere, the methane intensity calculations will capture some additional emissions data from other industries.

Capturing the presence of methane from other sources reflects the functional level of GHGs from the production regions, highlighting the need for emissions management across industries.

S&P Global uses these monthly methane intensity figures to derive daily Methane Intensity Premiums (MIP) which calculate the cost of bringing the MMBtu of average natural gas production per production basin to a methane intensity of zero. MIPs are calculated by multiplying the MI of each basin by the daily price of the Platts Methane Performance Certificate assessment (AMPCA00), which represents one MMBtu of zero methane intensity natural gas production.

Methane intensity data will be published on a monthly basis for the previous month on the third Monday of each month or the next working day. For example, on April 18, S&P Global will begin publishing the March MI calculations.

The MI calculations are published in the following units of measure:

• methane emitted as a percentage of gas production (methane intensity percentage)
• metric tons of methane per MMBtu (mtCH4/MMBtu)
• metric tons of carbon dioxide equivalent per MMBtu (mtCO2e/MMBtu)

The MIP calculations are published daily to 1:30 pm Houston time in dollars per MMBtu ($/mmbtu) and dollars per metric tons of carbon dioxide equivalent ($/mtCO2e).

The 19 basins and associated symbols covered by the MIPs are:

The Methane Intensity Calculations and associated MIPs will be published in the following locations:

• Platts Dimensions Pro
• AGP (Americas Gas & Power)
• ETA (Energy Transition Alert)
• Pages AGP0122, PGN0108 Gas Daily

Please send any comments and feedback to Platts_Carbon@spglobal.com, AmericasGasPricing@spglobal.com, and pricegroup@spglobal.com

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