I’m a pretty outspoken cynic with regard to carbon offsets, but here’s a project that looks like it is for real. According to Trellis,
“Enterprise software company Workday is … buying emissions offsets that will be generated by projects to close orphaned oil and gas wells that could leak methane, a more potent greenhouse gas than carbon dioxide.”
Project developer Tradewater “is hoping to build a similar consortium of potential customers for non-CO2 removal projects, along with a financing structure it has informally dubbed a ‘climate mitigation bank’ to make purchases simpler. ‘The idea is that the bank would hold a number of credits that would be available’ as needed, [Tradewater chief marketing officer Kirsten Love] said.”
I like the concept of definitively eliminating point source emissions far more than waving a magic wand to claim sequestration amounts, additionality and permanence for forests, agricultural land and oceans.
While the physical emissions reductions and GHG benefits are real, potential risks remain:
- The ability to own, claim and transfer these offsets is dependent upon the project developers’ ownership of the mineral rights from the outset. If gas rights aren’t owned by the project, there is no legal basis for the developer to offer or sell offsets generated on the basis of the gas. Some time ago, I asked about this very thing to a couple project developers and others supporting their due diligence – some are aware of this and include mineral rights research in their work. One developer said “huh?”.
- The article quotes Erik Hansen, chief sustainability officer at Workday: “These [wells] are not going to be plugged absent of creating some form of carbon credit” – meaning they meet the “additionality” criterion. But I’m not so sure about that – legal questions surround that assertion. In Texas, the Railroad Commission rules require plugging of oil and gas wells “within a period of one year after drilling or operations cease” by the well owner/operator. In the case of abandoned wells where the owner/operator cannot be identified or located, a state-funded program exists to plug those wells. There is even a federally-funded program for well plugging. The article points out “The Bipartisan Infrastructure Law set aside $250 million for states to fund clean-up.”
So – are emissions “additional” if there is an existing legal obligation to eliminate them and the owner simply has chosen not to comply? Do applicable state laws and regulations mean that emissions reductions should have occurred because they are legally mandated regardless of financial incentives provided by the carbon offset market?
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