Inside Zefiro's Plan To Transform America's Methane Menace Into Eco-Friendly Profits

Photo: This winter, Zefiro/P&G remediated the pictured well site in Cuyahoga Valley National Park in Ohio

Disseminated on Behalf of: Zefiro Methane

• There are more than 3.7 million abandoned oil and gas wells in the U.S. and Canada that have been left to deteriorate and leak methane, a potent greenhouse gas that is warming the planet at a rapid pace — U.S. federal government has put aside US$4.7 billion to remediate this issue.
• About 14 million Americans live within just one mile (1.6 km) of these wells that pose significant environmental and health risks.
• Zefiro's business model of methane abatement and selling high-quality carbon credits shows impressive gains in revenue and market share — US$407,000 EBITDA in the first quarter of 2024.

Nestled in the heart of Ohio, Cuyahoga Valley National Park is a haven of lush forests and waterways boasting scenic trails and a wildlife wonderland.

But look a little harder and you will find that this green oasis is also marred with the relics of an industrial past that is posing significant environmental hazards to the region.

Scarring the 33,000-acre park are more than 80 abandoned oil and gas wells — potential sources for leaking methane, a potent greenhouse gas that is warming the planet at a rapid pace, even as the aging fossil fuel infrastructure threatens groundwater and its environs. On a 20-year timescale, methane is up to 84 times more potent than carbon dioxide.

"Virtually every corner you turn you’ll see evidence of a well. You might see the plunger, the typical plunger or the gas holder tanks, but you’ll see some type of evidence of oil and gas in this park," Veronica Dickerson, an Environmental Protection Specialist with the U.S. National Park Service, told local media.

Dickerson said the wells were drilled decades ago dating back to the early 1930s and that at least a dozen of them within the park boundaries pose immediate health and environmental risks.

"It's a microcosm of a much larger issue plaguing North America, where more than 3.7 million abandoned oil and gas wells in the United States and Canada have been left to deteriorate and leak methane and other noxious contents into the surrounding environment," said Talal Debs, Founder & CEO of Zefiro Methane Corp. (Cboe Canada: ZEFI).

"Whether an unplugged oil and gas well is located next to a school, business, or just off a trail of one of America's most beautiful national parks, the potential environmental risk it poses cannot be allowed to fester. Recent studies show that at least 4.6 million Americans live within half a mile (0.8km) of documented orphaned oil and gas wells, while 14 million live within just one mile (1.6km)."

Zefiro Methane Corp., an environmental services company specializing in methane abatement, recently completed a well plugging project within the Cuyahoga Valley National Park, working with its subsidiary Plants & Goodwin Inc.

Previously, Zefiro helped successfully remediate a well in South Wales, New York, a state which has over approximately 23,000 unplugged sites.

Photo: South Wales NY (October 2023): Talal Debs and U.S. DOI Infrastructure Coordinator Winnie Stachelberg]

Funding for these projects was drawn from the 2022 Infrastructure Investment and Jobs Act, where the U.S. federal government has set aside US$4.7 billion to help States permanently plug orphaned wells.

"The magnitude of the problem is just being realized," said Debs, whose company is leveraging decades of operational expertise from its leadership group, to build a new toolkit to clean up air, land, and water impacted by methane leaks.

Turning Environmental Liabilities into Revenue Streams

According to Debs, Zefiro has two core lines of businesses that are highly integrated with one another to create economic value by solving one of the largest environmental problems in North America.

The first involves asset retirement where Zefiro and its subsidiaries seek to plug and remediate thousands of orphan, abandoned, and unattended gas and oil wells every year across 26 States in the U.S.

A well is considered "orphaned" when it is inactive (i.e., not producing oil or gas in any meaningful quantity), is left unplugged, and has no solvent owner of record.

A Columbia University report estimates that to plug just 500,000 of these wells in the U.S. could cost as much as USD$24 billion.

The second involves Zefiro's environmental market services operation that sells the economic benefits of the cleanup to investors as carbon abatement credits.

This allows for credits to be generated directly from well-plugging projects, based on the "carbon equivalent" tonnes of emissions prevented from entering the atmosphere as a direct result of the remediation efforts.

"Zefiro's business model helps offset emissions but also turns a potential environmental liability into a revenue stream," said Debs.

This April, Zefiro announced that it had successfully completed its first listing on the American Carbon Registry ("ACR") — a globally recognized program that tracks offset projects and issues offset credits for each unit of emission reduction or removal that is verified and certified.

Zefiro now has two of its methane abatement projects listed on ACR, which has issued over 100 million metric tons of carbon offset credits — the equivalent of removing over 21 million cars from the world's highways for one year.

Prior to the listing, Zefiro had already presold a portion of its methane emission offset portfolio to Mercuria Energy America LLC ("Mercuria"), the United States-based division of one of the world's largest independent energy and commodities groups.

"This landmark transaction signals to the entire sector that not only is there a robust market for high-quality methane emission offsets, but also that plugging these wells is integral to both our national public health and the long-term success of the energy industry," said Tina Reine, Chief Commercial Officer of Zefiro.

Tina started her environmental markets career in London at Cantor Fitzgerald's Environmental Markets group in 2007, selling forward contracts on carbon offsets. She also helped build out the environmental markets division at JPMorgan and at NextEra Energy, managing an equity investment portfolio of carbon projects. Previously, she was Director of Commercialization for the carbon offset market at World Kinect Energy Services.

Zefiro Methane announced a presale of methane emission offset credits to EDF Trading on July 9, 2024. EDF Trading is a leading player in the international wholesale energy market and part of EDF Group, a global leader in low-carbon energies.

As part of its growth strategy, Zefiro also announced in May that its subsidiary, Plants & Goodwin, Inc., has opened an additional yard in its operating territory of Appalachia to efficiently tap into the US$29,233,057 that has been allocated for West Virginia to eliminate the on-going methane emissions from hundreds of wells in the state. There are over 6,300 orphaned oil and gas wells in West Virginia alone.

Unprecedented Global Demand for Carbon Offsets

With unprecedented global demand for carbon offsets, Zefiro's business model of developing and selling high-quality carbon credits is showing impressive gains in revenue and market share.

Under an executive leadership that includes members of the former carbon market team at J.P. Morgan, Zefiro just released its very first earnings report as a public company.

Coming from having no substantive earnings two years ago, Zefiro reported record revenues of US$8.5 million, a gross profit margin of 31%, and EBITDA of US$407,000 in the first quarter of 2024.

"In the carbon markets, there is a persistent demand for transparent and verifiable carbon offsets that originated from U.S. projects," said Debs.

"At the same time there is an increasing level of sophistication in understanding and quantifying the orphan methane crisis in North America."

This has created a perfect intersection of supply and demand for Zefiro to transform America's methane menace into eco-friendly profits.

To learn more about Zefiro Methane Corp., visit their website here.
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This post was authored by an external contributor and does not represent Benzinga’s opinions and has not been edited for content. This contains sponsored content and is for informational purposes only and not intended to be investing advice.