Highwood’s Latest Report details continued Rise of Natural Gas Certification
Highwood Emissions Management Inc. (“Highwood”) released its 2022 edition of their popular report, An Overview of Voluntary Emissions Reduction Initiatives for the Oil & Gas Industry. The report surveyed 24 voluntary initiatives available to the oil and gas industry, revealing explosive growth in volumes of certified natural gas – more than 100-fold since 2021, with trillions of cubic feet now certified.
Jessica Shumlich, Highwood’s CEO, commented that, “there has been no clear path for O&G companies seeking to benefit from the transition towards lower GHG emissions. This report presents the first systematic comparison and evaluation of the diverse voluntary emissions reduction pathways available”. This was further supported by Thomas Fox, Highwoods’s President, who added that, “with this report, the O&G industry, investors, end users, and regulators are now able to make intelligent decisions and step more confidently towards the production and sale of responsibly sourced oil and natural gas.”
Equitable Origin was amongst the 24 featured voluntary initiatives in this report, with the EO100™ Standard standing out as having high levels of disclosure and transparency compared to some of the other initiatives. The report emphasized the EO100™ Standard’s inclusion of the entire spectrum of assurance against broad ESG performance. It also emphasized how the evolution of EO’s Standard recognizes buyers growing interests to gain knowledge on carbon intensity of the supply chain that they are supporting – via the EO100™ Standard’s GHG intensity reporting metric that includes a consistent methodology in which all certified sites will be reporting against each segment of the value chain they operate. The report additionally details the importance and impact of collaboration between standard associations, pointing at EO and MiQ’s partnership as an example to follow. The partnership has helped create standards that are independent, transparent, technology neutral, asset level scope, and free from conflicts of interest.
Additional key findings within the report show that focus has shifted from focus on primarily the production segment of the natural gas supply chain to further include midstream and downstream segments while protocols that rely on direct measurement instead of industry averages are on the rise. New LNG sector initiatives to prove low-carbon cargoes are also on the uptick. Furthermore, newer initiatives are developing guidance for specific industries and segments while collaborations amongst the initiatives are increasing as well. Independent auditing, while still uncommon, is also on the rise. Certifications, guidelines, and commitments are also most commonly not mutually exclusive and can complement one another while being broad in their geographical and sectoral spectrum.
The Highwood report suggests that the oil and gas industry should continue to work collaboratively towards an industry where rigorous, measurement-based independent certification is the norm.
Six key knowledge gaps are identified in the report: (1) How can consolidation and harmonization of initiatives improve? (2) How can emissions measurement technologies be used to collect meaningful data? (3) What is the level of effort required for a rigorous measurement program? (4) How should reconciliation of measurements and bottom-up inventories be performed? (5) Is there a meta-initiative that can collect, aggregate, and disseminate reported data? (6) How can more robust and transparent differentiated gas markets be established?
To guide stakeholders and address these knowledge gaps while realizing wider adoption and greater participation by the oil and gas sector in these initiatives, Highwood concludes with a set of seven recommendations that should be considered. These recommendations can be viewed by viewing and attaining the report provided within the link here.
A virtual conference, jointly hosted by Highwood and Petroleum Technology Alliance Canada, will be held on September 21st, 2022, to discuss the report. Click here to register for this conference.