Exxon pursues methane integrity grading for some of its Permian shale gas

HOUSTON (Bloomberg) --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 7% 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.