As advocates, states, and shareholders have all pushed gas utilities to prove they can drastically reduce emissions while maintaining a workable business model, many of these companies started promoting vague plans for adopting false solutions like hydrogen, "renewable natural gas," and purchasing gas "certified" as lower emissions.
Gas utility company New Jersey Natural Gas inked what was likely the first purchase of so-called “certified gas” in September 2018. Since then, numerous other utilities have proposed or executed similar purchases of certified gas, passing along the extra costs to customers despite mounting evidence that these programs rely on unreliable technology and methods.
But an examination of utilities pursuing certified gas purchases across the U.S. over the past year shows a common thread is emerging: both utilities and state regulators are struggling to explain what if any, real-world benefit these deals would have for the households and businesses they serve.
For example, in New York, utility Consolidated Edison, on May 31, 2024, was required to file its first annual report updating state regulators about the company’s certified gas pilot program. That filing revealed that:
In 2024, ConEd and its sister utility Orange and Rockland spent an additional $280,000 purchasing certified gas at a premium.
Gas suppliers can cherry-pick which of their gas wells they choose to certify. As ConEd sought to purchase certified gas from suppliers, the filing shows the company received three offers from producers willing to supply the utility, with anonymized copies of their responses buried in ConEd’s report. The first of these producers responded that about 55% of its total production was certified by MiQ (while also divulging that the company did not have a plan for transitioning its fleet of wells to modern zero-emitting pneumatic devices – an easily fixable source of routine methane pollution). The second company also responded that MiQ certified about 55% of the company’s total production. The third company, certified by Project Canary, responded that its certified volumes represented 37% of its total production. Allowing producers to pick and choose which portions of their assets receive certification provides an obvious opportunity to leave out their oldest and leakiest facilities.
The report contains a brief section on emissions data. It attempts to quantify reductions by comparing the estimated methane intensity of its certified gas against an estimated average methane intensity for gas produced in the Appalachian region. However, both the certified gas and the benchmark estimates are known to use the EPA’s Greenhouse Gas Inventory, which has been widely assessed as substantially underestimating emissions. This raises a bigger unanswered question – are the certified gas purchases actually lowering total emissions, or are they just shuffling who claims credit for using gas that is better than the average in this part of the country? As we have previously pointed out, there is insufficient proof that gas certification programs do anything to push the industry to go beyond the status quo.
Meanwhile, in Colorado, state regulators, on June 10, 2024, officially ruled against allowing local utility company Xcel Energy’s attempt to comply with their new Clean Heat obligations through a large certified gas purchasing program. Regulators concluded that, even if well-intentioned, it was impossible to measure any benefit from the proposed certified gas program, stating:
“the proposal leaves too many questions unanswered for us to approve it here. The most pressing of these questions regards the baseline against which emission reductions due to [certified gas] would be measured. There is no universally-accepted definition of [certified gas], there are no data in the record indicating average or typical methane intensities for producers in Colorado, nor is there an established state or federal standard setting a ceiling for methane intensity. These issues are more than technicalities, as they make it difficult, if not impossible, to determine the size of any claimed greenhouse gas reductions, making it difficult to understand the value from an emissions standpoint, especially at a time when state regulations governing upstream suppliers are already tightening.”
In the District of Columbia, local gas utility Washington Gas is also attempting to make certified gas purchases a cornerstone of its climate plans. The company has already started purchasing certified gas, saying it now represents about 8% of the gas flowing through its system. Yet, on October 27, 2023, District utility regulators ruled that they need the utility to supply more detailed information about whether or how the company’s certified gas procurement activities are assisting the District in achieving its climate goals. However, the company has requested multiple extensions, and almost one year later, it still has not come to an agreement on new minimum reporting criteria for assessing how its gas procurement activities impact the District’s climate goals.
State regulators in Michigan have also pushed back, issuing a ruling in September 2024 that warned gas utility DTE that it would not permit future "responsible gas" purchases "without more evidence quantifying and explaining how [responsibly sourced gas] delivers benefits to customers," and in a subsequent November ruling disallowed the company's requested $180,000 in certified gas cost premiums.
However, the issues with cherry-picked data and benchmark comparisons are just the beginning. As we have shown in two reports, certified gas rarely lives up to its claims. In addition, the latest data from agencies like the International Energy Agency (IEA) and the United Nations Environment Programme’s International Methane Emissions Observatory show that oil and gas sector methane emissions are rising in line with production growth in the US and globally. This strongly suggests that the industry is making unsubstantiated claims about methane reduction efforts. It appears more concerned about image than cleaning up. It’s time for producers and utilities alike to come clean. The path to emissions reduction is via a phase-out of fossil fuels. Nothing else can be trusted.
Thankfully, developments over the past year, like Colorado's first-in-the-nation Clean Heat rules, demonstrate that utilities and policymakers have real solutions for cutting gas system pollution. That is by reducing gas use and increasing electrification. In the past few months, other leading states like California and Massachusetts have followed suit, having passed new climate laws that make it easier for their utilities to start transitioning their businesses off of gas while continuing to meet the needs of their customers. It’s crucial that we hold utilities accountable for false claims around certified gas and other forms of gas greenwashing while advocating for real solutions like electrification and renewable energy.