Exxon to have gas graded for methane leaks amid climate push

Exxon Mobil Corp. will offer some of its Permian Basin shale gas for certification by a nonprofit that assesses methane leaks, a move that comes as the oil industry faces unprecedented pressure to clamp down on emissions. 

About 200 million cubic feet per day of gas produced from Exxon’s marquee Poker Lake development in New Mexico will be graded by MiQ, a partnership between Systemiq, which describes itself as a global sustainability consultancy, and RMI, formerly the nonprofit Rocky Mountain Institute. That’s about seven per cent of Exxon’s total U.S. gas output. Certified gas could be available by the fourth quarter, the Irving, Texas-based company said Tuesday in a statement.

Energy companies including Exxon are keen to tout natural gas as a green fuel of the future because it produces far fewer emissions than coal at the point of burning. But methane leaks from production sites, compressor stations and pipelines undermine the environmental case for gas. Methane is about 80 times more potent than carbon dioxide over its first two decades in the atmosphere.

Shale oil and gas producers, especially from the Permian, have come under attack from environmentalists for letting methane leak largely unchecked. French utility Engie SA postponed a decision last year on a $7 billion deal to buy liquefied natural gas from the U.S. due to environmental concerns. Exxon has been under pressure to improve its environmental performance this year, with three dissident directors elected to its board after an activist campaign.

Gas certification may help to alleviate some of those concerns. MiQ grades gas from A to F depending on its methane intensity, or how much leaks into the atmosphere as a percentage of total gas produced. EQT Corp. the country’s biggest gas producer, signed up with MiQ, earlier this year. 

Exxon ranks in the bottom quartile among its integrated oil peers on environmental issues, according to Bloomberg Intelligence’s ESG scores. The ranking is based on indicators including emissions, exposure to transition risk and greenhouse gas reduction targets. 

© 2021 Bloomberg L.P.

Dear user, please be aware that we use cookies to help users navigate our website content and to help us understand how we can improve the user experience. If you have ideas for how we can improve our services, we’d love to hear from you. Click here to email us. By continuing to browse you agree to our use of cookies. Please see our Privacy & Cookie Usage Policy to learn more.