Low Methane Natural Gas Holds Nearly Half of U.S. Market Share

(Bloomberg) - As global buyers increasingly scrutinize the top-to-bottom emissions of the fuels they use, the production of responsibly sourced natural gas - a minority idea only a few years ago - is growing rapidly in the United States.

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According to a report from BloombergNEF, the percentage of certified supply of so-called RSG in the U.S. is expected to rise from 38% in 2023 to 45% this year, which translates to about 47 billion cubic feet per day of certified natural gas, which the company says has a low methane footprint, among other benefits. Across the oil and gas industry, nearly 40 companies are on track to supply RSG by the end of 2023.

Starting in 2018, upstream producers are the first companies to seek voluntary certification. Now, a variety of buyers, including utilities, liquefied natural gas (LNG) exporters and industrial users, are looking at the certified fuel as a possible way to reduce supply chain emissions.

In their report, BNEF analysts wrote that the premium for low-methane gas is estimated to be only about 10 cents per million BTUs, making it "the cheapest Scope 3 emissions reduction option for gas buyers, even cheaper than voluntary carbon offsetting."

But RSG is not without its obstacles, and BNEF says the Biden administration's decision earlier this year to put a moratorium on new LNG export terminals may hinder the market's development. Meanwhile, the lack of federal guidance - which certifies that companies set their own standards - has drawn some criticism. Environmentalists have also derided the idea of cleaner natural gas as a naked attempt to dilute the negative impact of fossil fuels.

More Info Responsible Sourcing' Natural Gas Finds a Niche in What Some See as 'Greenwashing' Behavior

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