Natural gas certification took off in 2021 as a way for companies to more transparently share where they’re at with methane emissions, as an additional way of curbing the potent greenhouse gas.
One such organization that made headlines throughout the year was MiQ. MiQ grew rapidly in popularity due to its commitment to transparency, robust rhetoric, and straightforward grading system for facilities. They now certify over 11% of US natural gas production.
To learn more about MiQ and its vision for a market-based solution to methane emissions reduction, we sat down with Georges Tijbosch, CEO of MiQ.
Georges: We are a not-for-profit organization set up by RMI and SystemIQ, and our mission is the abatement of the vast majority of methane emissions from the oil and gas industry by the end of this decade.
It’s a big problem: methane is 84x as potent in climate terms as CO2 over a 20-year timeframe, so by reducing the volumes emitted we can make a big impact quickly. Not only that, but the oil and gas sector is responsible for 84million tonnes of methane annually - double Europe’s total CO2 emissions each year.
The positive thing is this can be addressed – it’s what we call the lowest hanging fruit when it comes to climate change. According to our calculations, 80 percent of these emissions from oil and gas could be abated by 2030, i.e., this decade. That means removing the equivalent of six billion tons of CO2e from the equation: six or seven times the airline industry’s yearly emissions.
So how do we do this? We need transparency. That’s where MiQ comes in. We've created a scheme to certify operators’ facilities based on their methane emissions, shedding light on the methane implications from this gas to help bolster greater climate transparency in the global gas market.
Georges: It really comes down to the fact that we need transparency around methane emissions, specifically transparency at what we call the point of decision making. To tackle methane emissions, companies need a granular understanding of where these are coming from, as well as robust methane mitigation practices and technology to enable them to actually address the issue. That’s currently quite difficult.
MiQ has developed a global solution for a global issue, grading gas on methane emissions to drive change in parallel with regulation through a not-for-profit and independently audited certification standard. We certify at a facility level - think liquefaction plant, an operating basin of an operator, an LNG ship, a large pipeline. Once we know the methane emissions from that facility, we issue certificates, meaning that gas is then certified and graded based on how well it is performing in terms of methane emissions.
The theory is that differentiating producers based on their methane emissions performance will incentivize businesses to improve because it simply makes good climate – and business – sense.
Because people will want a lower methane gas, you will then get pricing differentials in the markets because market forces will start to intervene. Once you have that, there is a clear signal to the producers that the laggards in methane emissions are going to have to upgrade their facilities. And that is ultimately going to push everybody up the curve one by one. That's how the certification leads to differentiated gas, which leads to pricing signals, then operators have an incentive to start reducing methane emissions.
Georges: It takes anywhere between one and three months, for certification to take place. MiQ created the standard – the rulebook on what should be measured – which is then used by third-party auditors to do the actual audits on the ground.
From there, the facility is certified, then that goes into our digital registry and monthly we issue the certificates on the gas produced. We issue one certificate for MMBtu into the registry and then they can sell that gas together with a certificate.
It really comes down to this: we create this framework and then let all the different companies come in and thrive in that environment, with the goal of bringing methane emissions lower.
Georges: It's totally key.
Auditors are required to have stringent processes in place to retain integrity, transparency, and trust.
Operators we work with must engage an auditor to carry out a detailed and rigorous assessment of natural gas production at the facility level against the MiQ Standard, which they pay for. Auditors will assess the facility during various phases of the certification process, including a final, compulsory, look back audit.
You need to have that segregation of duty between the entity that develops the standards and the entities that are doing the actual audit work. We want to be really clean-cut here - this is too important. This must be transparent and robust.
There's also another reason for doing this: there are loads of good, knowledgeable audit consultancy engineering firms out there. We've heard "How are we going to certify the whole globe?" It can be done. There are enough engineering audit companies out there to accomplish this because there are so many already certifying on things like safety standards, for example. We can grow MiQ way faster by relying upon that market that is out there.
The same goes for which technologies are parts of the MiQ certification. We are totally technology-neutral because we know there are many monitoring technology companies out there, including yourselves, who have very good solutions and are evolving continuously and improving their solutions, bettering them, pushing the boundaries, making them cheaper, faster, etc. We want to rely upon the availability of the different potential solutions because it allows the certified natural gas market to grow really fast.
Georges: The biggest differentiator is only if you have certified gas that you actually know the methane emissions of what you're buying. Otherwise, there is no way you can figure it out credibly.
A lot of companies do a yearly report of what their average methane emissions are - according to them. The difficulty is that they've got operations everywhere, meaning it could be that the facilities I'm buying from are much better than that average number they’re claiming or much worse – as a buyer, it’s impossible to know.
There are all those complexities of the whole supply chain that MiQ is solving with what we call the certified supply chain. Now I know my methane emissions - and that's the biggest difference between the non-certified ones and the certified ones.
Georges: The most successful examples of genuine, impactful market-led certification are thorough, robust, and third-party verified – independently audited by established and trusted auditors with in-depth expertise. In addition, they are deconflicted – delivered not for profit to avoid adverse outcomes. They are also designed for the future: to collaborate not compete with regulators to ensure maximum global effectiveness. Finally, they are end to end. ‘Fairtrade’ coffee beans are not Fairtrade if they are only traceable as far back as the export dockyard. Certification systems must follow the product along the supply chain from the production asset to entry to the importing zone. MiQ, unlike some other providers, does all of these things.
I would say our biggest differentiator is we insist on that third-party verifier. We believe the human element of the auditor is key - to look at the different applications and see if they fit together and if that's a robust enough way of coming up with the methane emissions of a specific facility because each facility is different. An offshore platform with a lot of wind is totally different than an onshore platform in the middle of nowhere with zero wind. We're creating a global standard here, not a specific one for a specific area. We want robustness, and that robustness must come in via the external auditor and via the allowing of the different technologies to come in and thrive.
Georges: We’ve started with upstream because that's where a lot of the emissions are taking place. We are learning from it, and we're already preparing tweaks in the standards for next year.
But then there is boosting and gathering, processing, there are pipelines and there's LNG that need to be certified. What we will soon have is eight modules to cover every segment of the global supply chain, and that has never been done before. We can certify every segment - every facility.
And then it's what we call a certified supply chain, whereby if you certify the different segments to arrive at the destination of where the gas buyer is, then you can provide the methane emissions on the whole supply chain as certified.
Georges: I think one, they should just go for it. They're going to have to go for it anyway. The world has changed. And two - wherever it is they are in terms of methane emissions; they can abate them - that's not an issue. As I said earlier on, we think 80 percent of methane emissions is abatable with existing technologies, so it's not something impossible to solve. As some have said, it's good business and good for the planet - you can do those two things at the same time, and that's a bit of a game-changer.
We’ve seen leaders of the industry who have committed to certification: Chesapeake, EQT, Exxon, BP Northeast - the industry has dealt with so many other complex problems - highs and lows of the oil and gas industry over the last 20 years. This is just another transformation of the industry focused on how to deal with the methane emissions problem, and I believe the industry can do it.
Georges: To producers? Get going. What are you waiting for?
Learn more about MiQ and their Certification Standard on their website. Learn more about Bridger Photonics certification capabilities here.
Georges Tijbosch is the Chair and Director of MiQ Foundation, a not-for-profit partnership between RMI and SystemIQ which has developed a universally applicable certification standard for credibly assessing the methane performance of natural gas production around the world.
Georges is the former Director of Origination at Centrica, where he managed the team responsible for Centrica’s large gas and power transactions. Before that, Georges was a director for 10 years at London investment bank commodity trading desks. Georges began his career in 1996 at BP Netherlands as Sales and Marketing Manager for fuels and lubricants and joined BP’s London trading floor in 2000 as Senior Marketer, Oil Derivatives. Georges holds a Masters in Chemical Engineering from the Université Libre de Bruxelles, Belgium.