{"id":22659,"date":"2023-09-19T10:40:17","date_gmt":"2023-09-19T14:40:17","guid":{"rendered":"https:\/\/blogs.edf.org\/energyexchange\/?p=22659"},"modified":"2024-01-04T13:45:15","modified_gmt":"2024-01-04T18:45:15","slug":"new-york-utility-regulator-approves-a-first-of-its-kind-certified-gas-pilot-program-now-what","status":"publish","type":"post","link":"https:\/\/blogs.edf.org\/energyexchange\/2023\/09\/19\/new-york-utility-regulator-approves-a-first-of-its-kind-certified-gas-pilot-program-now-what\/","title":{"rendered":"New York utility regulator approves a first-of-its-kind certified gas pilot program. Now what?"},"content":{"rendered":"
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Con Edison East River Generation Station<\/figcaption><\/figure>\n

The New York Public Service Commission recently approved<\/a> a certified natural gas pilot program proposed by Con Edison, the gas and electric utility for much of New York City. Under the pilot, Con Edison may pay a premium for limited amounts of natural gas that is purportedly certified as having lower methane emissions than the gas Con Ed typically purchases to serve its customers. Methane, the principal component of natural gas, is a potent greenhouse gas that contributes to climate change. Research shows that a rapid, full-scale effort to reduce methane emissions \u2014 including from the oil and gas industry \u2014 could slow the current rate<\/a> of warming by as much as 30%.<\/p>\n

There are several reasons to be skeptical about whether this scheme delivers real environmental benefits and if it is worth the premium price Con Ed will pay, and ultimately pass along to customers. This pilot program should make good progress in answering these questions.<\/p>\n

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What is differentiated gas and why is industry so focused on it?<\/strong><\/p>\n

In some respects, differentiated natural gas, which is purported to be more environmentally friendly than other gas, is not new. Some oil and gas companies and utilities have been talking about \u201cgreen gas\u201d or \u201cresponsibly sourced gas\u201d for years as regulators and the public have focused on methane pollution from industry. A newer, rapidly growing industry practice is \u201ccertifying\u201d natural gas as having lower methane emissions or other desirable attributes.<\/p>\n

Enverus Intelligence estimated<\/a> that producer-certified gas would make up nearly a fifth of the North American natural gas market by the end of 2022. MiQ, one of the leading certification entities, states that it currently certifies 4% of global gas supply. Domestic and international purchasers, concerned about the impacts of climate change, appear to be willing to pay more for low-emission gas \u2014 one estimate puts this premium at 3-5 cents \/MMBtu<\/a>. Kinder Morgan launched a certified gas pooling service for shippers in 2022 \u2014 though its first annual report<\/a> indicated that it received no bids for the service. The state of California recently considered, and wisely rejected, legislation<\/a> that would have required the state to purchase only certified gas, without setting any meaningful standards for certification.<\/p>\n

But without a standard definition for certified gas, certifying entities assess different aspects of performance \u2014 methane emissions, water protections, community protections, etc. \u2014 at drastically different levels of operation and with little or no transparency into their technologies and methods.<\/p>\nNew York utility regulator approves a first-of-its-kind Certified Gas Pilot Program. Now what? <\/a><\/span>Share on X<\/a><\/span>\n

Why certified gas may not be a solution<\/strong><\/p>\n

EDF has worked on the problem of oil and gas methane pollution for over a decade, and our experience tells us that claims of reduced methane intensity must be viewed with healthy skepticism. Industry progress in reducing the methane pollution associated with natural gas production, transportation and use is checkered at best. Few companies currently do the kind of robust measurement-based accurate monitoring and reporting necessary to sustain a claim that the gas they produce is fundamentally cleaner than the industry average, and none we\u2019re aware of do so with the kind of transparency required to enable independent verification that the so called certified gas is really worth the premium price.<\/p>\n

EDF recognizes the value of industry efforts to reduce the methane footprint of the gas it produces. And we are supportive of efforts to create price signals in global gas markets for products that can be empirically demonstrated to pack less of a climate punch than non-differentiated gas. But without robust, uniform standards for transparency, measurement, reporting and verification, gas certification can become just an exercise in greenwashing.<\/p>\n

EDF has identified<\/a> primary concerns with gas \u201ccertification\u201d programs:<\/p>\n