Major NatGas Customers Publish Indicators for Producers

The Natural Gas Supply Collaborative (NGSC), comprised of some of the largest natural gas purchasers in the country and about which I first wrote here, has released its final Environmental and Social Performance Indicators for Natural Gas Production.

As described in this overview and an accompanying technical supplement, NSGC has identified 14 non-financial environmental and social performance indicators for natural gas production that “respond to stakeholder questions and highlight leading practices producers use to protect the environment and local communities.” The indicators center on methane and air emissions, water management, chemical use, and community and safety:

Table 1: Environmental and social performance indicator categories for natural gas production

Collectively, NGSC participants service more than 36 million U.S. households and generate enough electricity from natural gas to power almost 17 million U.S. households, according to NGSC’s managing entity, M.J. Bradley & Associates LLC. Why have they taken this step of banding together to set expectations of their suppliers? As the report says, “NGSC participants have realized the benefits of increased engagement with stakeholders through their own voluntary reporting and disclosure initiatives.”

Water, climate, chemicals, and safety are all central areas of business risk for the oil and gas industry—suppliers and customers alike. Some producers, like those certified by the Center for Responsible Shale Development, are moving in the right direction. Indeed, just last week, ten major oil and gas company CEOs—none, however, from U.S.-based companies—committed to “near zero” methane emissions across value chain. (That’s particularly smart, since up to 50% of methane emissions could be avoided at no net cost, according to IEA.)  And Shell’s iShale initiative focuses on technology development and deployment to minimize environmental impacts of oil and gas activities.

Investors, pioneered by efforts like Disclosing the Facts, are increasingly demanding that producers not only report on but act on sustainability initiatives. Now, through NGSC, natgas customers are joining the groundswell. The business case for sustainable natural gas production continues to grow.

John Quigley

Senior Fellow, Kleinman Center
John Quigley is a senior fellow at the Kleinman Center and previously served on the Center’s Advisory Board. He served as Secretary of the PA Department of Environmental Protection and of the PA Department of Conservation and Natural Resources.