US energy regulators have decided not to approve a definition of climate-friendly natural gas, rejecting a
The Federal Energy Regulatory Commission on Friday rejected a proposal by Tennessee Gas Pipeline Co., a unit of the Houston Energy Company, to complete its own certification process. The decision means the gas industry will likely have more work to do before presenting the idea to the commission again.
The commission’s order noted the lack of industry or government-set standards that could guide regulators as they enter the “nascent” responsible source gas, or RSG, market.
“It is unclear how the commission would assess Tennessee’s decision to adopt specific proposed criteria,” the commissioners wrote. “Given this early stage in the evolution of RSG standards, we believe it is appropriate to allow market-driven initiatives so that RSG’s development can occur organically.”
The order listed the five commissioners, without any dissent.
Kinder Morgan is “currently evaluating the FERC order and evaluating the best approach to gaining approval” for its proposal, the company said in a statement Monday.
The term “responsibly sourced gas” has emerged over the past couple of years to describe cleaner sources in terms of methane emissions associated with production. But opponents see it as a form of greenwashing. Methane, a potent greenhouse gas, can leak where natural gas is produced and transported.
Market analysts have suggested that RSG could come from gas operations that reduce greenhouse gas emissions, recycle water, restore land or make commitments to the community.
The company has sought to establish a specific level of methane emissions intensity, but there are currently no federal regulations for methane emissions in the oil and natural gas sector, the commission noted.
The company had asked the commission in December to allow it to use Project Canary or MiQ — two independent organizations that verify RSG claims — to determine what gas can be treated as “responsibly sourced” along its pipeline, which powers areas from New York to Texas. Gulf Coast.
The commission acknowledged that Project Canary and MiQ were “only a handful” of independent verification providers. Each vendor appears to set its own performance rating and varies in its methodology and business model, the commission wrote.
Additional examination necessary
Tennessee Gas’ proposal, filed in December, came to the commission as gas companies seek to voluntarily mark their product as low-emissions as investors seek climate-friendly options.
The Environmental Defense Fund, along with pipeline shippers, had asked the commission to convene a technical conference to review Tennessee Gas’ proposal. EDF and others had warned FERC that the pipeline company would have free rein to define which gas could be certified as responsibly sourced.
EDF did not immediately respond to a request for comment.
A trade group of industrial gas consumers questioned the impact of the proposal on prices, particularly whether each pipeline could choose its own standards.
Industrial Energy Consumers of America “agrees with FERC’s decision that the pipeline has failed to demonstrate that its rate is just and reasonable,” Paul Cicio, president and chief executive officer, said Monday. of the group. “There needs to be accountability for cost control. All of their costs are passed on to us, the buyers of the natural gas.