Texas-based Independent Energy Standards Corp. (IES) recently reached a milestone by certifying its 2,500th natural gas well with an asset rating system that’s allowing producers to sell their supply at a premium to local prices.

About 10 producers across the country have had their wells certified by IES’ TrustWell Responsible Gas Program. The system provides independent, third-party ratings for gas wells, or entire asset bases on a scale of 0-150 in an attempt to show buyers that the commodity is produced in the most environmentally responsible way possible.

The 2,500th well was rated as part of the second phase of work on a batch of coalbed methane (CBM) wells operated by Carbon Creek Energy LLC in Wyoming’s Powder River Basin (PRB).

“The way we built both the TrustWell rating system and the software underlying it is to be able to scale for this sort of thing,” IES CEO Jory Caulkins said of the differences between certifying CBM and unconventional wells. Shallow CBM assets tend to have lower production and far higher well counts. “They all go through the same kind of boring machinery and software to get that same output scoring.”

Business for IES has accelerated since last year, when Southwestern Energy Co. publicly announced that it struck a deal to sell TrustWell rated gas to utility New Jersey Natural Gas (NJNG) from a group of wells in West Virginia for a premium to local Appalachian index prices.

Caulkins said Carbon Creek is currently selling its TrustWell gas for a premium as well. Exactly how much more the producers are earning for their gas isn’t clear as details about commercial agreements have not been disclosed. 

IES was founded in 2014, but the Southwestern transaction attracted more interest from both producers and buyers, Caulkins said. The announcement was another indication of how the oil and gas supply chain has reacted to the increasing social and political awareness of how energy is produced and consumed. The industry has increasingly promoted corporate responsibility and sustainability initiatives.

“I think there is a need and that need is growing for responsibly developed energy,” Caulkins told NGI’s Shale Daily. “I think natural gas is an important part of the picture and now that folks are able to differentiate and source responsibly developed natural gas using an independent verification and certification method, that’s very powerful in enabling that.

“I think now that we’ve kind of opened the market with the Southwestern transaction and are able to scale quickly with how the market is growing it seems like things are accelerating.”

Carbon Creek formed in recent years with private equity funding and in 2015 acquired thousands of CBM wells in the PRB from WPX Energy Inc. and Anadarko Petroleum Corp.

Since then, the company has touted itself as a producer of “responsibly sourced” natural gas, working across a consolidated footprint in Wyoming. Carbon Creek’s assets require minimal processing and minimal surface equipment, while its gas is produced by drilling a well and installing a pump to lift water off those volumes. A portion of that water is then released through permitted outfalls for livestock or wildlife to use.

In a sign of the efficiency and certification programs that have cropped up for gas producers, Carbon Creek’s TrustWell rated wells were just one piece of a broader contract it announced late last year to sell the gas to East Coast Power & Gas Co., an energy services company serving parts of the mid-Atlantic. The company has also partnered with the technology firm Xpansiv to digitize its production data in a way that it can be tracked throughout the marketing process.

Carbon Creek’s Chris Ginsbach, vice president of finance, said the partnership with IES and Xpansiv is better allowing the company to differentiate its production. “We can now transact” on the rated volumes “with high credibility and at scale for buyers,” he said.

Caulkins, who works with both producers and gas buyers, added that Carbon Creek is in further discussions with other companies interested in the rated gas.

The TrustWell system evaluates a wide range of impacts and risks, with a focus on four main categories that include water, air, land and community. Within each category is a range of topics covering, among other things, emissions and methane, leaks and spills, well integrity, water sourcing and community engagement.

Over a process that can take anywhere from weeks to months, ratings are reached in three steps and can be renewed annually. IES charges a flat fee for certifications. Caulkins said Southwestern remains a customer.