Canadian producer in methane performance trade deal
Canada’s Pacific Canbriam Energy said October 18 it is part of an inaugural trade of methane performance certificates (MPCs), tradeable instruments intended to unlock the market value of reducing the environmental impact of natural gas production.
Macquarie Energy Canada arranged the first MPC trade between Pacific Canbriam, active in the low-carbon Montney natural gas play in northeast BC, and industrial gas customer Skeena Bioenergy, which manufactures wood pellets for export.
S&P Global Platts, working with Xpansiv, a global marketplace for ESG commodities, designed the MPCs, which are issued against natural gas production that has a methane intensity of less than 0.1%. Gas production below the threshold would receive MPCs representing a percentage of methane intensity below the industry average, which currently stands at 0.437% for natural gas produced in Canada and the US.
“For example, a producer with a methane intensity of 0.0874%, or 80% below the industry threshold, would receive 800 MPCs/1,000 mn Btu of production,” S&P Global Platts says in a website description of the system. The 0.1% threshold, it said, would be continuously reviewed as new data becomes available.
Only data that reflects measured emissions verified by a third party will be included in the MPCs, Platts said. In August, Pacific Canbriam became the second Canadian natural gas producer to earn EO100™ certification from Equitable Origin.
Pacific Canbriam says it is a world-leader in minimising methane leaks and vents in its operations, and adds its natural gas involved in this transaction is well below the threshold.
“With increasing focus on where energy comes from, Pacific Canbriam Energy is proud that the origin, energy content, and methane intensity of its natural gas has been externally verified as being responsibly sourced,” Pacific Canbriam president Paul Myers said.
The MPCs associated with all trades will be registered, issued, transacted and retired in accordance with procedures established in Xpansiv’s digital fuels (DF) programme, to eliminate double counting. Its DF registry maintains a complete record of the MPC and its associated environmental claims.
“MPCs allow the market to reward producers like Pacific Canbriam with low methane leakage, creating a clear market price related to fugitive methane emissions,” said Andrew Pisano, Xpansiv’s head of XRegistries.