US DOE will not develop certified natural gas standard amid focus on international emissions framework

The US Department of Energy does not plan to develop a standard for natural gas certified as low in greenhouse gas emissions and is focused instead on working with other nations to form a common approach toward tracking emissions across the natural gas supply chain, an agency spokesperson told S&P Global Commodity Insights July 21.

"DOE is not introducing or endorsing any natural gas certification measures or standards, but instead is working with natural gas importing and exporting countries to develop an agreed approach to MMRV [measurement, monitoring, reporting and verification] that provides consistency and accountability in the marketplace," the DOE spokesperson said in an email responding to questions.

Certified gas, also known as differentiated gas or responsibly sourced gas, is natural gas production that has undergone third-party certification of its performance against certain environmental, social, and governance metrics, with a heavy emphasis on having lower methane emissions. But the US has yet to coalesce around a single standard, and industry players in recent months have questioned whether the DOE would look to develop one.

The comments from the DOE came just days after the United States issued a joint statement with Korea, Japan, Australia and the European Commission pledging to accelerate mitigation of methane from the LNG supply chain.

The DOE spokesperson said the agency's MMRV work "focuses on bringing minimum performance criteria, independent verification, and transparency to the multitude of related industry, NGO, and international government initiatives directed at quantifying emissions throughout the natural gas supply chain."

In March, DOE officials had met with US gas industry representatives and foreign officials on the sidelines of the CERAWeek by S&P Global conference in Houston to discuss a potential governing framework for certified gas.

The same month, the agency awarded about $47 million in grant funding for 22 projects to advance the development of technologies to detect, quantify and reduce methane emissions across oil and gas producing regions in the US. The DOE in April also issued a request for information "related to opportunities to reduce greenhouse gas emissions and other pollutants" associated with US LNG exports.

"The aperture has widened," said Ben Cahill, Center for Strategic and International Studies senior fellow, in an interview July 19. "Originally, people conceived of it and thought of it as kind of a way to figure out certified gas. Now, I think there's clearly a desire to look at the gas and LNG supply chains, encompassing all those different parts of the value chains, so liquefaction and shipping, not just the domestic parts."

International effort

The joint statement issued July 18 expressed support for creating an "internationally aligned voluntary approach" for emissions tracking across the natural gas supply chain. The participating countries specifically said they intend to encourage voluntary industry participation in efforts such as the Oil and Gas Methane Partnership 2.0 and backed efforts to assess methane emissions of LNG projects.

Korea and Japan also "expressed their support for" an effort launched July 18 by Korea Gas Corporation and Japan's JERA called the Coalition for LNG Emission Abatement toward Net-zero, or CLEAN, in an effort with LNG buyers and producers to curb methane emissions in the LNG value chain.

The US, Australian and European officials did not go as far, saying in the joint statement that they "acknowledge the establishment of" the program.

Nearly 150 US environmental advocacy groups had urged the DOE in a July 19 letter to "stop any efforts" to develop a standard for certified gas, calling it a "dangerous diversion" that the oil and gas industry is using to increase production and transportation of methane gas far into the future.

One of the groups leading the pushback against DOE, Oil Change International, described the DOE's statement to S&P Global as "the clearest statement we have seen yet that the DOE will not set standards for US certified gas."

"We remain concerned, however, for the potential of MMRV to provide cover and legitimacy to an industry that must aggressively be both cleaned up and phased out," the group's Lorne Stockman said July 21.

Emissions focus

In terms of certified gas, US operators have collectively certified nearly 30% of US gas production using one or more of the three main standards: the MiQ Standard, Project Canary's TrustWell Standard and Equitable Origin's EO100, according to S&P Global data.

The Natural Gas Supply Association, a US trade group representing producer marketers, said July 11 that it had not taken a position on a potential certified gas standard from DOE amid a lack of consensus among members.

"Across the industry, some are looking at that and still trying to decide," NGSA President Dena Wiggins told a small group of journalists in a interview at the LNG2023 conference in Vancouver, Canada. "Some are supportive. I think there are some companies that believe that self-certification is the way to go or that even if there is some entity that should be doing the certification that this is not DOE's role to play."

"Everybody is working on it, but how to get there is still a conversation," Wiggins said.