Methane emissions are one of the most significant drivers of climate change. With a global warming potential 84 times greater than CO₂ over a 20-year time frame, the time to manage methane is now.

The oil and gas industry emits the equivalent of 7bn tonnes of CO₂ each year, equal to eight times the emissions from the global aviation sector, or all the CO₂ emissions from the world’s cars and trucks.  

Fortunately, the industry has the tools to abate up to 5.7bn tonnes by 2030. This would get us 17% of the way to halving global annual greenhouse gas emissions by 2030, the equivalent of taking 1.2bn polluting cars off the road.

The industry already has the tools to abate around 75% of these emissions at little to no cost today, providing a quick and effective way to avert one of our most pressing climate risks.  

Significant global initiatives  

Several voluntary coalitions have already helped the oil and gas sector take significant strides to reduce methane emissions, including the Oil and Gas Methane Partnership 2.0 (OGMP), the Methane Guiding Principles (MGP) coalition and the Oil and Gas Climate Initiative (OGCI).  

These coalitions are bolstered by international commitments like the Global Methane Pledge, a collective effort to reduce global methane emissions by at least 30% compared to 2020 levels by 2030. In addition, regulation such as the EU Methane Strategy has been put forward by the European Commission. This regulation sets out measures to cut methane emissions in Europe and internationally, for example, by introducing an obligation to improve detection and repair of leaks in gas infrastructure. 

Independent, transparent certification standards, like the one designed by MiQ, offer a ‘third way’ between voluntary action and regulation to drive emissions reductions. These standards can create transparency on methane emissions performance and give the market the granularity it needs to improve operations, in support of existing voluntary and regulatory efforts.

What is missing?

Currently, because there is no credible mechanism to accurately account for emissions, the price of gas is unrelated to its methane emissions performance. Though the industry has the tools to solve the methane problem, transparency and incentives have been missing.  

Operators can only manage what they can measure. To do that, they need a clear picture of the level of methane emissions across the gas lifecycle. Once producers know what their methane emissions are, and crucially where they are happening, it is possible for them to abate the majority of methane emissions from the oil and gas sector with existing technology, such as early device replacements, compressor seals or rods, and leak detection and repair (LDAR) services both upstream and downstream.

Gas that has been graded based on its methane emissions performance creates differentiation between producers, judged by a critical environmental metric. In turn, this creates a new element of competition in the market and an incentive for producers to improve their emissions performance.

However, in the past there was no way to differentiate better performers from worse or create competition to drive improvements. To address this information shortfall, MiQ has pioneered the use of Independently Certified Gas (ICG) to provide the data needed to drive change on global methane emissions.  

Creating a data-led grading means buyers can choose between higher and lower emissions gas which will incentivise improvement across the board.  

Differentiating oil and gas producers based on their methane emissions performance will incentivise businesses to improve, because it makes good climate and business sense.

To tackle methane emissions, companies need a granular understanding of where these are coming from, as well as robust methane mitigation practices and the technology to enable them to address the issue.  

MiQ has developed a global solution, grading gas on methane emissions to drive change in parallel with regulation through an independently audited certification standard. This standard enables a credible assessment of methane performance of natural gas production worldwide. Adopted at scale, the certification system could create a differentiated market for natural gas for buyers and sellers.  

The standard is independently assessed, highly qualified third-party audited, technology neutral, granular and graded across a sliding A-F scale based on three metrics: methane intensity, company practices and methane detection technology deployment.  

Independent, third-party auditors conduct the certification process, using the MiQ Standard. Each batch of gas is then given a grade from A through F.  

An A to F grading for methane emissions is then attributed to a facility and is reviewed regularly. Certified facilities will be issued on a monthly basis with MiQ certificates for the gas produced. These certificates can be relied upon to prove the methane emissions of gas traded between the sellers, traders, and buyers. The markets will do the rest.

The standard will create the pricing signals for the sector to invest in abatement technology and practices, enabling the methane reductions necessary to support global climate targets. It is also compatible with existing voluntary schemes, as well as regulatory frameworks, and will evolve as technologies and best practices improve.  

The company’s performance criteria, for example, have been adapted from voluntary global industry and regulated best practices, as identified in legislation, voluntary programmes, and other technical guidance documents. Where possible, the standard aims to align with other existing industry and national initiatives to streamline reporting.

The system has a stringent governance structure with clear segregation of duties and has been designed so that it can be adopted by regulators anywhere in the world, offering a ‘performance and markets based’ regulation for gas.  

But emissions do not happen in isolation and the world needs end-to-end understanding of how and when they happen, including when gas travels across oceans. With that in mind, MiQ has developed the Certified Supply Chain (CSC), a certification standard which covers the whole natural gas supply chain, allowing buyers to get a clear picture of emissions from start to finish. Certification is carried out at asset level to provide a clear understanding of where and how emissions occur in each part of the supply chain.

The CSC enables gas buyers to compare, for the first time, the full upstream methane emissions of purchased gas on a level playing field and can be used to understand and assess the emissions of LNG cargoes. This has become particularly important as global demand for LNG surges.  

Furthermore, MiQ’s Digital Registry is a secure virtual ledger where all MiQ Certificates are held from issuance to retirement. The digital registry is key to the CSC, enabling the creation of an aggregated score across all stages of the gas supply chain from production to delivery at the grid. The registry creates transparency about methane emissions, preventing the double-counting of certificates, and enabling end-users to claim environmental credentials for their greenhouse gas reporting.

MiQ is currently certifying 10bn cf/d of gas – about 2.5% of the global gas market. The organisation is working with some of the world’s largest operators, including ExxonMobil, BP and Repsol, to drive emissions reductions across the sector. Over 350bn cubic feet of industrial and commercial gas (ICG) is currently available for trading on the MiQ Digital Registry.  

Earlier this year, EQT, the largest US natural gas producer, announced its first sale of ICG to Bloom Energy, following the certification of a majority of its natural gas production using the MiQ Standard and Equitable Origin’s EO100 Certification.

The growing demand for ICG and momentum behind MiQ is an encouraging sign for methane abatement in the oil and gas sector and shows that, with the right incentives, the industry has the opportunity to drive significant progress on addressing climate change while we transition to a world run on clean energy.