Low-methane natural gas captures almost half the U.S. market

The production of responsibly sourced natural gas — a niche idea only a few years ago — is growing rapidly in the US as global buyers increasingly scrutinize the top-to-bottom emissions of the fuels they burn.

The share of US supply certified as so-called RSG is estimated to hit 45% this year, up from 38% in 2023, according to a report by Bloombergnef. That would mean production at a rate of about 47 billion cubic feet per day for the certified gas, which companies say offers a lower methane footprint, among other benefits.

Across the oil and gas sector, nearly 40 companies were approved to supply RSG at the end of 2023.

Upstream producers were the first companies to seek out the voluntary certification starting in 2018. Now, diverse buyers including utilities, liquefied natural gas (LNG) exporters and industrial users are looking at the certified fuel as a possible way to lower emissions along their supply chains.

The premium for low-methane natural gas is estimated at only about 10 cents per million British thermal units and is “the cheapest scope 3 emission reduction option for gas buyers, even cheaper than voluntary carbon offsets,” the BNEF analysts wrote in the report.

Still, RSG is not without its hurdles.

The Biden administration’s decision earlier this year to pause the approval of new LNG export terminals could stunt the growth of the market, BNEF said. Meanwhile, the lack of federal guidance — meaning certifying companies set their own standards — has garnered some criticism. Environmentalists have also derided the idea of a cleaner gas, saying it’s a naked attempt to downplay the negative impacts of the fossil fuel.