One Tonne - Carbon Credit Markets

What will it take to get sustained benefits from natural gas? Examining the climate impacts of methane leakage from natural gas
There has been much confusion about the impacts of increased natural gas use on the climate. While natural gas burns cleaner than other fossil fuels when combusted, methane leakage from the production, transportation, and use of natural gas has the potential to undermine some or all of those benefits, depending on the leakage rate.  Methane is the main ingredient in natural gas and a greenhouse gas (GHG) pollutant many times more potent than carbon dioxide (CO2), the principal contributor to man-made climate change.
In other words, leaks during the production, distribution, and use of natural gas could undermine the greenhouse gas advantage combusted natural gas has over coal and spell major trouble for the climate.
Methane leakage study
The good news is that leaks can be detected, measured – and reduced. EDF is currently collaborating with industry and academic partners on a series of five scientific studies to measure methane leakage rates across the natural gas supply chain. Among our partners are the University of Texas (UT), Duke University, Harvard University, Boston University and leading natural gas companies. EDF aims to complete the entire study by December 2013.
The first study, set for completion in January 2013, seeks to estimate the methane emission rates from participating companies’ natural gas production by conducting direct measurement techniques at a sample of natural gas production sites. It brings together EDF, UT and nine of the nation’s leading natural gas producers: Anadarko Petroleum Corporation, BG Group plc, Chevron Inc., Encana Oil & Gas (USA) Inc., Pioneer Natural Resources Company, Shell, Southwestern Energy, Talisman Energy, USA, and XTO Energy, an ExxonMobil subsidiary. Findings from the study could help guide how companies, states and the federal government measure, monitor and manage methane emissions.
Methane leakage paper
An enhanced method for assessing climate impacts from natural gas development and use is offered in Greater focus needed on methane leakage from natural gas infrastructure, a scientific paper in Proceedings of the National Academy of Sciences co-authored, with others, by EDF scientists Ramon Alvarez and Steve Hamburg.
The paper illustrates the importance of accounting for methane leakage across the value chain of natural gas (i.e. production, processing and delivery) when considering fuel-switching scenarios from gasoline, diesel fuel and coal to natural gas.
Key findings of the PNAS paper, based on the best available estimates on methane emissions from the EPA, include:
  • Assuming the Environmental Protection Agency’s (EPA) 2009 leakage rate of 2.4% (from well to city), new natural gas combined cycle power plants reduce climate impacts compared to new coal plants; this case is true as long as leakage remains under 3.2%.
  • Assuming EPA’s estimates for leak rates, compressed natural gas (CNG)-fueled vehicles are not a viable mitigation strategy for climate change because of methane leakage from natural gas production, delivery infrastructure and from the vehicles themselves. For light-duty CNG cars to become a viable short-term climate strategy, methane leakage would need to be kept below 1.6% of total natural gas produced (approximately half the current amount for well to wheels – note difference from well to city).
  • Methane emissions would need to be cut by more than two-thirds to immediately produce climate benefits in heavy duty natural gas-powered trucks.
  • At current leakage rate estimates, converting a fleet of heavy duty diesel vehicles to natural gas would result in nearly 300 years of climate damage before any benefits were achieved.
Related resources Methane leakage model
Our economics team has created a methane leakage model based on the science in the PNAS paper. The model explores the climate implications of reducing emissions from natural gas systems in the context of a switch towards natural gas-fueled technologies.
To use the model, enter a policy case of desired values for natural gas leak rates and sector fuel mixes. Power plant efficiencies can also be modified. The model outputs a graph and summary table of the impact of that policy case on the climate. Results are represented as a percentage change in net radiative forcing relative to 2010 U.S. emissions.

World Bank Sees Warning Sign in Gas Flaring Increase
July 3, 2012
WASHINGTON DC, July 3, 2012 — New data showing a two-billion cubic meter increase in flared gas in 2011 over the previous year is a warning that efforts to reduce flaring need to be sustained and even scaled up, said officials with the World Bank-led Global Gas Flaring Reduction partnership (GGFR).
The slight increase in flaring from 138 billion cubic meters in 2010 to 140 bcm in 2011, revealed in latest satellite data, is due largely to increased hydrocarbon production in Russia and shale oil and gas operations in the US state of North Dakota. While not significant when viewed against the longer-term 20% drop in flaring since 2005 — from 172 to 140 bcm — the new increase is a warning sign, World Bank officials said.  Gas flaring reductions since 2005 have cut greenhouse gas emissions by a volume equivalent to that emitted by some 16 million cars.
The small increase underlines the importance for countries and companies to sustain and even accelerate efforts to reduce flaring of gas associated with oil production,” said Bent Svensson, manager of the GGFR partnership. “It is a warning sign that major gains over the past few years could be lost if oil-producing countries and companies don’t step up their efforts.”
Some of the highlights from the 2011 satellite data on flaring include:
Overall, global flaring has increased by 2 bcm, from 138 bcm in 2010 to 140 bcm in 2011. 
The USA, Russia, Kazakhstan, and Venezuela are the main contributors to this increase. These countries need to step up their efforts in associated gas utilization. The same applies to Iraq.
Most of the increased flaring in the USA comes from North Dakota, where there has been an important increase in activity related to shale oil and gas production.
Russia still tops the world's flaring countries, followed by Nigeria, Iran and Iraq.  The USA is now the fifth flaring country in the world, with some 7.1 bcm of gas flared in 2011.
Latest satellite estimates also show some continuous progress in flaring reduction in Nigeria, Algeria, Mexico and Qatar.  These countries need to sustain their flaring reduction and gas utilization efforts.
By reducing gas flaring, oil-producing countries and companies are improving energy efficiency and mitigating climate change,” said S. Vijay Iyer, Director of the World Bank’s Sustainable Energy Department.  “Instead of wasting this valuable resource, we now need to develop gas markets and infrastructure so the associated gas can be utilized to generate electricity and cleaner cooking fuels.”
Inconsistent data and often under-reporting of gas flaring by governments and companies has complicated the global effort to track progress on flaring reduction. GGFR’s cooperation with the US National Oceanic and Atmospheric Administration (NOAA) to use satellite data aims to improve the reliability and consistency of global gas flaring data. This has now resulted in more consistent national and global estimates of gas flaring volumes from 1995 through to 2011.
The GGFR, a public-private initiative of some 30 major oil-producing countries and companies, aims to overcome the challenges for the utilization of associated gas, including lack of regulations and markets for associated gas utilization. GGFR partners’ main objective is to reduce the environmental impact of gas flaring, as well as the waste of a valuable energy source.
Global gas flaring, estimated in 2011 at 140 billion cubic meters (bcm), also accounts for some 360 million tons of greenhouse gas emissions. Eliminating these annual emissions is equivalent to taking some 70 million cars off the road.
Note to Editors:
The GGFR partners include: Algeria (Sonatrach), Angola (Sonangol), Azerbaijan (SOCAR), Cameroon (SNH), France, Gabon, Indonesia, Iraq, Kazakhstan, Khanty-Mansiysk (Russia), Kuwait Oil Corporation, Mexico (SENER), Nigeria, Norway, Republic of Congo, Qatar, the United States (DOE), Uzbekistan; BP, Chevron, ConocoPhillips, ENI, ExxonMobil, Marathon Oil, Maersk Oil & Gas, Pemex, Qatar Petroleum, Shell, Statoil, TOTAL; the European Union, the European Bank for Reconstruction and Development (EBRD), the World Bank Group; Associated partner: Wärtsilä.

A carbon credit is a generic term  representing the right to emit one tonne of carbon or carbon dioxide equivalent (tCO2e).

According to the EPA, Global Anthropogenic Non CO Greenhouse Gas Emissions: 1990-2020 report, dated June 2006, oil and natural gas operations are a significant source of global methane emissions, constituting approximately 18 percent of total human-made methane emissions. The report also indicates that in 2005, global oil and natural gas methane emissions totaled approximately 82 billion cubic meters (Bcm), or 2,896 billion cubic feet (Bcf), equivalent to about 1,165 million tonnes carbon dioxide equivalent (MtCOe). Based on an average natural gas price of $4 (USD) per 28.3 Bcm (or $4 per thousand cubic feet (Mcf)), this equates to approximately $11.6 billion (USD) worth of gas lost. In addition, these emissions have an equivalent annual greenhouse gas effect of adding more than 223 million passenger vehicles to the roadways for one year. (Source: Greenhouse Gas Equivalencies Calculator). Given these results and methane's role as both a potent greenhouse gas and clean energy source, reducing these emissions can have significant economic and environmental benefits.

A Clean Energy Standard (CES) would double the share of electricity from clean energy sources to 80 percent by 2035 from a wide variety of clean energy sources, including renewable energy sources like wind, solar, biomass, and hydropower; nuclear power; efficient natural gas; and coal with carbon capture utilization and sequestration. By creating a market here at home for innovative clean energy technologies, we will unleash the ingenuity of our entrepreneurs – and ensure that America leads the world in clean energy.

One carbon credit (or carbon 'offset') is a closely regulated certificate representing a reduction of one metric ton of carbon dioxide being released into the atmosphere. In dollar terms, carbon credits price per ton is about $5 to $40 U.S. Dollars, based on the type and verification of quality.

Are carbon credits the new global currency? Carbon Recovery believes a realistic financial approach to the marketing of Carbon Credits is already happening.

Mechanisms to Reduce Greenhouse Effect Emissions

To reduce carbon and greenhouse gasses emissions thus mitigating global warming, is Kyoto Protocol. Kyoto Protocol is an agreement between 170 countries which provide mechanisms to reduce greenhouse effect emissions on an industrial scale by capping total emissions and letting the free market assign a monetary value to any shortfall through trading.

If you are thinking of investing into the Carbon Credit Voluntary
(VERs) or Compliance (CERs) Market then the Carbon Credit Price Checker
can source you carbon credits and projects that will suit your financial needs.

The Carbon Credit Price Checker
will only recommend credits or projects that are regulated by the
UNFCCC with a full validity report and are of the highest
VCS or Gold standard quality.

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Due to the market now worth 250 Billion in the 5 years it has been established, the carbon market is set to be worth a Trillion dollars inside the next 5 years. With this growth the city square mile has seen a lot of companies formed and trading credits with no real idea of how the market works and how to obtain a return for their clients or even how to work out a company's carbon footprint.

Carbon credits and carbon markets are a component of national and international attempts to mitigate the growth in concentrations of greenhouse gases (GHGs). One carbon credit is equal to one ton of carbon dioxide, or in some markets, carbon dioxide equivalent gases. Carbon trading is an application of an emissions trading approach. Greenhouse gas emissions are capped and then markets are used to allocate the emissions among the group of regulated sources. The goal is to allow market mechanisms to drive industrial and commercial processes in the direction of low emissions or less carbon intensive approaches than those used when there is no cost to emitting carbon dioxide and other GHGs into the atmosphere. Since GHG mitigation projects generate credits, this approach can be used to finance carbon reduction schemes between trading partners and around the world.
There are also many companies that sell carbon credits to commercial and individual customers who are interested in lowering their carbon footprint on a voluntary basis. These carbon offsetters purchase the credits from an investment fund or a carbon development company that has aggregated the credits from individual projects. The quality of the credits is based in part on the validation process and sophistication of the fund or development company that acted as the sponsor to the carbon project. This is reflected in their price; voluntary units typically have less value than the units sold through the rigorously validated Clean Development Mechanism.

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