In July 2024, our CEO, Reid Calhoon, took the stage at the Carbon Management Americas Conference hosted by S&P Global in Denver, Colorado. The event gathered top minds from various sectors to discuss the latest trends and innovations in emissions abatement and carbon strategy – themes at the core of ClimateWells’ mission. Reid’s participation in the panel titled "An Examination of New Environmental Certificates: Trends and Innovations" highlighted our efforts to utilize carbon credits and the voluntary carbon market to incentivize decommissioning marginal oil wells, significantly reducing methane emissions and advancing the energy transition.
Moderated by Anne Robba, Head of Future Energy Signposts at S&P Global Commodity Insights, the panel also included Ben Webster, Director of Policy at MIQ, and Megan Lorenzen, Director of Climate & Energy at Salesforce. The panel explored the evolving market for Renewable Energy Certificates (RECs), methane certificates, the development of differentiated gas markets, and the oil and gas sector’s capacity to generate carbon credits.
Catch up on 3 key takeaways from Reid’s remarks below:
Environmental Certificate Impacts
There has been significant progress made in the voluntary carbon market. Carbon credits have been instrumental in reducing deforestation rates and on average, companies that purchase offsets decarbonize their operations more rapidly and perform better financially. This success demonstrates the potential of environmental certificates to drive meaningful climate action.
Recently, the Biden Administration released new voluntary carbon policies focused on ensuring market integrity and promoting high-quality credits, aligning with our mission. The White House's emphasis on the early decommissioning of high-emission sources is particularly encouraging, as it supports our efforts to shut down marginal oil wells and reduce methane emissions more effectively.
Methodology and Market Dynamics
One of the critical aspects of ClimateWells’ approach is using carbon credits to incentivize the early decommissioning of marginal wells. Unlike orphan wells, which often lack responsible owners, marginal wells are still operated by small companies with high liabilities and low revenue. ClimateWells measures emissions using the Rocky Mountain Institute’s Oil Climate Index and develops verifiable emission reduction projects. This method ensures that the environmental impact is immediate, tangible, and permanent, benefiting both the environment and local communities.
Developing new carbon credit types is a complex and rigorous process. ClimateWells has spent four years refining their credit methodology to meet leading carbon registry standards and prevent exploitation. The early decommissioning of high-emission wells is a growing sector within the US carbon credit market, targeting significant and unnecessary emissions.
Recommendations for Policy Makers and Industry Stakeholders
Policymakers, industry stakeholders, and investors can accelerate the carbon credit and environmental certificate market by privately purchasing carbon credits to better address portfolio needs before making public commitments. Additionally, matching credits to specific business-related emissions sources can enhance public acceptance and credibility.
With ongoing government support and guidance, the voluntary carbon market is poised to grow and establish itself as a credible, reliable resource for climate strategy and emissions reductions.
