Q&A: How new shale gas standard system could impact industry

By Staff | September 17, 2018

Independent Energy Standards has created a new system for differentiating shale gas production streams. Through it’s trademarked TrustWell Responsible Gas Program, IES is able to utilize data, analytics and other information sources to rate gas and the producer in a system similar to LEED ratings for buildings.

Recently, Southwestern Energy Co. contracted with New Jersey Natural Gas—a company that serves more than half a million customers throughout New Jersey—using the TrustWell system.

We spoke with Jory Caulkins, IES CEO on the implications of the new system and what it could mean for the greater shale gas industry. 

To start, can you explain why now is the right time for this unique TrustWell system?

Significant and growing demand from end markets (gas purchasers) for responsible energy, and particularly natural gas, coupled with our increased understanding of the complexity in assessing “responsibility” in a credibility way made this the right time to establish a market for responsibly course natural gas.

 What criteria/variables does the best type of TrustWell have to have? 

Given the range of type of operations, types of practices and varying geographies, a one-sized fits all check list of practices does not provide an accurate or scalable way to assess production at a national or global scale.

TrustWell has been developed to be able to assess the millions of different combinations of risks and practices out there, and distill them into credible, robust and understandable scoring (like a LEED rating for a building). 

One of the main elements of the best operators we have seen, is that they have a cultural commitment at all levels of the organization to continuous improvement, regardless of their starting point. 

TrustWell ratings range from Silver to Platinum. A Platinum rating receives 125+ points. This rating is reserved for the top 10 percent of peers with a demonstrated mastery over risk control and implementation. 

How can natural gas producers become part of the TrustWell program? 

Producers and purchasers can participate in the program. And, producers join the program by having a portion or all of their product TrustWell rated, and are then able to market the TrustWell Responsible Gas. Purchasers join the program by working with TrustWell Rated producers to purchase TrustWell™ Responsible Gas as part of their energy mix. 

What is the benefit to gas buyers/users to participate in the program? 

Gas buyers are able to assert themselves as clear market leaders by incorporating differentiated, responsible gas as part of their energy mix. This means increased responsibility, more choice, and the cost to end-gas consumers is negligible (an additional $0.20 - $0.90 per month per average US household). 

If a well receives a low score, what are some of the steps a well could undergo to get a better score? 

There are always things that a company can do to improve, and our analysis helps highlight for them where they get the best return on this investment in terms of risk and impact reduction, and therefore score. Often we provided a prioritized list of action items a producer can take to improve their score, and provide context on the cost (time and capital) for each. 

What is the timeline for a well to undergo the evaluation process and become part of the TrustWell program?

The rating process can take anywhere from two weeks to four months, largely dependent on the number of wells and the producer's willingness to commitment to expediting the process.  

What are the major impacts of this new program to the greater shale gas industry? 

This is the first time in the history of the industry that natural gas, historically considered a commodity, has been transacted on as a differentiated premium product. TrustWell Responsible Gas has connected the end gas consumers with the upstream developers of these resources with a powerful economic mechanism. 

This opens the floodgates for energy consumers to have more choice, and ultimately use that choice to harness market forces, reward responsible gas producers, and have a powerful lever in driving responsible development.