In this episode of Methane Talks, a forward-thinking podcast, Host Olivia Schurer features Paul Hajek, Chief Revenue Officer for Envana Software Solutions, and Liz Arthur, Global Head of Enterprise Strategy for EarnDLT.
Hosted by the Industrial Decarbonization Network.
Paul Hajek – Envana Software Solutions
Paul has dedicated his career to bridging the gap between new technology and its implementation in the oil and gas sector, driven by a passion to help this vital industry reach new heights. Paul’s career spans well control and upstream operational excellence, oil and gas software, and cleantech.
Liz Arthur – Earn DLT
Liz Arthur’s role entails helping customers and buyers achieve their ESG goals by leveraging over 18 years of experience in oil and gas and technology. Liz’s roots in the industry were formed as a landman for Chesapeake Energy where she played a vital role in helping to develop the Barnett Shale. Liz is well known in the ESG community for her ability to transform markets and connect members across the industry value chain to pursue their ESG and differentiated gas goals, and her passion for building a more sustainable future.
Liz, can you walk us through what blockchain or Distributed Ledger Technology means in the context of emissions management?
Liz- Absolutely! There’s no better way to start. Sometimes I feel like blockchain is a little taboo or it’s odd becoming even coming from upstream oil and gas. But I have really fallen in love with the technology over the past few years being more immersed in it. It simply means that you can digitize an immutable specific set of data that you can trace throughout its existence or life. In the space of emissions management, we’re talking about methane intensity, carbon intensity, environmental attributes. That set of data is then digitized into permanent data. Transparency of course is key, but it’s also about being able to trace that data set throughout the life — in this case today we’re going to talk about a gas molecule —but it can be for many different compounds. You can trace that data set for the life of that molecule leveraging this technology.
Ok, it’s really about building that history book essentially of data that people can refer back to for years to come.
Liz- 100%! This is really stemming from replacing what was very much a paper trail. When we talked about commercial transactions, it was, “I can’t wait to do this deal with you, I’m going to send you my environmental attributes in the form of PDFs.” So, it would create risk. What if I wasn’t there to send that over time? It just seemed like we needed a better digital solution. That’s where blockchain steps in.
For sure, it sounds much more efficient. Paul, what’s missing today in the emissions management software space that Envana is now addressing with Earn DLT? How do you put the two things together? Where did your team see the benefit or need for collaboration?
Paul- In a word, it’s transparency. There’s an opportunity that exists today for oil and gas companies to add transparency to their carbon value chain. Especially in light of things like CBAM — the Carbon Border Adjustment Mechanism — which is the used tool to put a fair price on the carbon emitted during the production of carbon-intensive goods. That also encourages cleaner industrial production in non-EU countries as well. In a word, it’s about transparency. What we’re providing on the Envana side is critical value chain information about your greenhouse gas inventory and doing that in an optimal environment — an environment that centralized, that’s governable, and helps people work in a trusted space where they can count on the data being reliable, also being transparent and auditable. Companies are running into regulatory requirements on the transparency front like never before. There are so many different standards, there are a million acronyms. But increasingly, they’re less tolerant or unwilling to accept things like manual entries or spreadsheets as the source of truth, especially when we’re talking about something as important as a quantified emissions token. Therefore, this need arises, as Liz likes to put it, for this “nutrition label” for buyers to know what they’re getting in their differentiated gas. Back to the original question: what we’re providing in our emissions management solution at Envana is transparency — the needed transparency across the entire value chain for this critical exchange of information.
I think it’s so important that you mention that transparency piece, as it is central to everything that we discuss within the methane emission space. Whether it’s on the regulatory front — particularly looking into the European space, with the new import standards… I think that’s going to become far more important obviously for US operators and as well just looking into more general markets. Whether it’s carbon credits, if the data isn’t there and it isn’t trustworthy, then how can we move forward? I think it’s key from so many different angles.
Liz, back to you: QETs come up a lot in my reading about kind of blockchain and the work that Earn DLT does. What is QET? How does that improve the ability to market natural gas in international markets? Who are the buyers? Do you help match buyers and sellers? Essentially, what are they and how does it function in practice?
Liz- 100%! I joke I would make a hell of a matchmaker for gas or methanol or all sorts of molecules. I identify more as a market enabler. When I think about that term — coming from so far upstream and then you get down into this emissions data management space where Paul lives — it’s so siloed. There definitely is an existing silo between operations and sustainability and all critical work that is being done, and as Paul said, all these regulations. Then, how do we commercialize this? How does this tie to the downstream market? The QET — the quantified emissions — it’s an immutable data set. It’s primary data. Paul is right: there are a lot of acronyms: We started with responsibly stored gas, certified gas, differentiated gas… The best definition now is measured, recorded, and verified primary data. That’s so key as you move further downstream. It really is like a nutrition label for that gas molecule. Those ingredients come from someone like Paul. Those ingredients on the nutrition label are carbon intensity, methane intensity, greenhouse gases, and maybe some additional environmental attributes. Actual measurement.
There are three key ingredients into a QET:
We want site-level data. So even though we report as an industry, in Subpart W, now at a basin level, we’re looking for that step further that so many good leaders and companies have already moved to. We’re looking for site level data.
We want some type of advanced measurement. There are so many excellent technologies out there. We want operators and midstream companies to choose that technology that’s fit for purpose, and that’s also adjusted by someone like a Paul.
The third part is the validator, which is extremely crucial to a QET. So outside of my contract, Earn assigns a third-party validator because all this data — whether it’s from Paul or another company — is verifiable but not validated. There is a difference. To truly mitigate that risk for the downstream, we assign a third-party validator. This is like an SDS Global, or Spirit Environmental. What they’re doing is just auditing. What is that methodology? Do we understand where that technology is coming from? Does that carbon intensity specifically need a global standard? Do we understand how this is going to fit into our downstream buyers’ life cycle analysis (LCA)? That is so critical! Measurement data. Having a validator. Production data. Other environmental attributes are present.