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Virginia Natural Gas part of first contract to reduce methane emissions from wells to customers

Virginia Natural Gas part of first contract to reduce methane emissions from wells to customers

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Virginia Natural Gas is partnering with a Pennsylvania-based gas producer and three pipeline transmission companies to reduce the escape of methane — a greenhouse gas linked to climate change — at every link in the chain from the well to homes and businesses.

The natural gas distribution company, based in Virginia Beach, announced an agreement on Thursday with Southwestern Energy to reduce methane emissions in gas production to less than 1%.

The deal is the first in the country to make that guarantee for every stage of the gas supply chain, extending from Southwestern Energy wells in Lycoming County, Pa. — home to Williamsport and the Little League World Series — to customers “from the suburbs of Richmond to the oceanfront,” said Ken Yagelski, director of gas supply for Southern Company, which owns Virginia Natural Gas.

Both companies are founding members of Our Nation’s Energy Future, or ONE Future, an industry trade group founded in 2014 to reduce methane emissions at every stage of the natural gas supply chain in the face of rising public concern — and environmental activism — about the use of fossil fuels that generate greenhouse gases that magnify global warming.

“From my perspective, what this shows is that environmental performance matters to customers,” said Mark Brownstein, senior vice president for energy at the Environmental Defense Fund, which has focused on reducing methane emissions in gas production, transmission and distribution for a decade.

Brownstein said he did not know the details of VNG’s new commitments, but said generally, “Gas utilities are responding to demand from customers to find the cleanest possible source of gas.”

ONE Future also includes the pipeline transmission companies that transport natural gas to the local distribution system — Dominion Energy, Williams Transco and Columbia Gas Transmission, now part of TransCanada Energy. The system connects to a VNG pipeline extending from Quantico through the Richmond area down the Peninsula to Hampton Roads.

“Our whole mission is to drive methane emission reductions,” said Virginia Natural Gas President Jim Kibler, who helped persuade the U.S. Environmental Protection Agency to endorse the program under then-President Barack Obama.

Under the two-year agreement, Virginia Natural Gas will buy one-fifth of its gas from Southwestern Energy. The distribution company said it will buy the rest of its supplies from other producers that impose controls to reduce methane emissions below 1% by 2025.

Kibler said the company reduced methane emissions from its operations to 0.552% in 2017 and expects further improvement when data for 2018 are released next week. “The results are better,” he said.

Southern Company and Southwestern Energy were among four companies in the ONE Future coalition that joined the Methane Challenge Program that the EPA launched in early 2016 during the Obama administration to reduce emissions of a gas that the federal agency called “25 times more potent than carbon dioxide in warming the planet.”

In Virginia, Gov. Ralph Northam issued an order last year that directed state environmental regulators to develop ways to limit methane leaks from natural gas infrastructure and landfills.

“This type of program is the direction we hope companies will go,” said Tamera Thompson, air permitting manager at the Virginia Department of Environmental Quality, which is working on methane reduction proposals for the governor.

The natural gas industry has promoted the fuel as a bridge away from dirtier coal, but Southern Company and Dominion are partners in the Atlantic Coast Pipeline, an embattled $7.75 billion project to transport natural gas 600 miles from shale fields in West Virginia to markets in southeastern Virginia and North Carolina, including VNG. Pipeline opponents say the project will worsen methane concentrations in the atmosphere by carrying gas produced by hydraulic fracturing, or fracking.

VNG and Dominion say they are developing new ways to reduce methane emissions. This week, for example, Dominion announced it and Smithfield Foods are doubling their investment in technology to capture methane from hog waste lagoons and recycle it for fuel.

The companies are boosting their investment in their Align Renewable Natural Gas joint venture from $250 million to $500 million. Dominion said the expanded operations will produce enough renewable natural gas to power 70,000 homes and businesses by 2029.


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