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The Montreal-based company is the only business in the world to offer high-resolution satellite-collected empirical evidence of greenhouse gas emissions, particularly methane

Richmond Lam /The Globe and Mail

The rocket launch from Cape Canaveral is scheduled for 2:35 p.m., and anyone with a vested interest—heck, anyone geeky enough to get excited about space—would be forgiven for being a tad nervous. Besides the weather, which can thwart a launch mere moments before liftoff, extraterrestrial travel, even when unmanned, is risky business. But at T-50 minutes, you’d never suspect that the Montreal party that’s gathered on this sunny late-May day to watch the SpaceX event in real time via video conference might be worried. Instead of nail-biting, the 70 or so staff from GHGSat and some of its suppliers—including astrophysicists, data analysts, quantum optics specialists and aerospace engineers in plaid shirts, jeans and sneakers—are busy chatting and laughing over beer and wine from the open bar. There’s a palpable sense of excitement. No wonder: When that rocket reaches orbit, it’ll deploy three satellites that these people have poured their minds and hearts into creating. If all goes well, there will be champagne.

GHGSat’s business proposition goes beyond rocket science. The Montreal-based company, with offices in Ottawa, Calgary, Houston and London, U.K., is more into saving the future by helping to fix the climate crisis. It’s the only business in the world to offer high-resolution satellite-collected empirical evidence of greenhouse gas emissions, particularly methane, on a commercial basis. Its satellites were the first to get high-resolution imagery of the massive methane leak from the Nord Stream 2 pipeline—the biggest leak from a single-point source the company has detected so far—in the Baltic Sea at the end of September. And the constellation also pinpointed a continuous emission in Central Asia that posed a challenge to the Paris Agreement on reducing emissions and limiting climate warming to 1.5°C. While some of GHGSat’s clients are governments and institutions, between 60% and 70% are from the oil and gas sector—corporations looking to comply with sustainability goals, and increasing demands from regulators and financial markets to demonstrate concrete steps to shrink their carbon footprints by detecting and plugging, for instance, fugitive emissions from compressor stations, pipelines and extraction sites. Indeed, at the café where the SpaceX launch event is being held, three large video screens run a loop of infomercials, including visualizations of emissions the company has detected in different parts of the world.

At 2:05 p.m., Stephane Germain, GHGSat’s president, joins the crowd via speakerphone. He’s in Florida, looking out over the launch pad and SpaceX’s Falcon 9 rideshare rocket. “This is a big moment. I never thought this could happen 12 years ago,” he says about the imminent expansion of the company’s constellation with three satellites, adding to the three already in orbit. “Fingers crossed for a successful launch!” There’s applause before the group goes back to mingling. Then someone yells “One minute to go!” People turn their attention away from the smoked-salmon bagels, blue lollipop cakes with stars and Astronaut ice-cream sandwiches to the video screens in the room. At T-10 seconds, the room goes quiet. It’s the final countdown.

Stephane Germain leans forward, resting his elbows on one of the tables in GHGSat’s light-filled lunchroom. He twirls a retractable ballpoint pen, and for each rotation, presses its button against the tabletop. Click. Click. “I was building moon bases with Lego when I was a kid and always knew I wanted to do something with space. I also knew early on I wanted to be an entrepreneur.” So in addition to his 1991 engineering degree from Queen’s University, three years later he got an MBA from INSEAD in Paris.

“In the 1990s, space was about big money and big robotic arms, and projects took decades to develop,” says Germain, whose CV includes work on multiple Space Shuttle missions, the Canadarm and satellite projects with the likes of Spar Aerospace in Toronto and EMS (now part of MDA) in Montreal. “Then in the mid-2000s, we saw the miniaturization of tech,” he says, waving his iPhone in the air. “You could finally do something useful with something small.”

Germain shows off an imaging spectrometer built to detect gases from space.

That’s when Germain, the son of a businessman (his father is a civil engineer, working in construction), started seeing a real potential for merging his own space ambitions with his passion for the environment. (The 1992 Rio Earth Summit, the predecessor to the United Nations Conference of the Parties, or COP, meetings, took place just before he did his MBA.) “I said to my dad, ‘Getting into space will cost at least $100 million, so that’s not going to happen.’”

But the shrinkage of everything from satellite buses and payloads to computers and optics meant the path he’d set for himself since he was a kid was no longer a mirage. And when Quebec linked its carbon cap-and-trade program with California’s in 2014, his optimism grew. The program put a price on carbon emissions to encourage industry to bring greenhouse gases down to 1990 levels by 2020. But to reduce emissions, companies would need to know where those happened and when, and how big they were. Germain saw a market for data.

He called up François Rodrigue, a former colleague at the aerospace arm of the defence contractor now called L3Harris, where Rodrigue was vice-president of finance. Germain wanted help developing a business plan, and Rodrigue took on the role of finance partner and is now CFO. They funnelled some of their personal savings and money from friends and family into a holding company to acquire Xiphos Technologies, a Montreal-based developer of radiation- and vibration-resistant computer processors and software for lunar rovers, space stations and satellites. Eric Edwards, then Xiphos’s owner, joined forces with Germain and Rodrigue as chief technology officer, and in 2011, GHGSat was born.

To get the company up and running, the three founders bootstrapped the firm using profits from Xiphos. It wasn’t enough capital for an office and staff, so they prioritized R&D. Piggybacking on Xiphos, in 2014 they hired a physicist with experience in quantum optics and gas-sensing instrumentation to spearhead the development of systems and instruments for detecting and quantifying greenhouses gases from space. In 2016, GHGSat launched its own demo satellite to test the technology they’d been working on. “There was a lot of skepticism from the scientific and business communities,” says Germain, “but we were able to prove you could detect emissions from space.”

As seen from 500 kilometres above the Earth’s surface, there was one particular image that stood out. Its urgent message was simple: Turkmenistan, you have a problem. That, basically, was what GHGSat wanted to convey to the central Asian nation when, in 2019, the company’s constellation detected a methane emission larger than anything it had ever picked up before. (Belching up to 43,000 kilograms of gas per hour, it now pales in comparison with the Nord Stream 2 disaster, which was spewing up to 79,000 kilograms per hour when detected on Sept. 30.) “We’d been asked by some scientists to check out a mud volcano close to the Caspian Sea that they believed was emitting methane,” says Germain. “When our satellites flew over the area, we focused the lenses on the volcano’s coordinates. We didn’t see the mud volcano. But at the edge of the field of view, there was this huge methane plume. Instead of burning the gas, [the operator of the oil field] was venting it,” recalls Germain. (Burning methane, customary when flaring, is less harmful than venting it, because burning converts it to water vapour and CO2, which is not as potent a climate warmer as methane.) “We were completely blown away.”

His team called the Turkmen government repeatedly, but the alerts fell on deaf ears. It took several months of diplomatic efforts involving the Canadian, U.S. and EU ambassadors before the leak was finally plugged. Mitigating the fugitive methane from that oil field had a CO2 equivalent of five megatonnes, or five billion kilograms, which is like taking one million cars off roads for a year. “The impact we can have is real,” underscores Germain, loudly clicking his pen.

That sway is possible thanks to the proprietary technology developed by GHGSat. Jason McKeever, the head of science and systems and the physicist hired in 2014, explains that the secret sauce is in the light-sensitive high-resolution optical technology that, unlike any other remote-sensing satellite in use today, can pick up a tiny leak in a pixel as small as 25 by 25 metres. And thanks to ongoing R&D, in August the company detected emissions above water that were 100 times weaker than anyone else had been able to detect. Water looks even darker on infrared, which until then made the spectrometry particularly tricky, if not impossible. This means offshore oil and gas rigs can now be added to the monitoring from space.

Monitoring GHGSat’s satellites in real time from the control centre in Montreal

Over tea in the conference room at the company’s science hub, three floors up from the main office area, McKeever explains that different gases absorb light that’s reflected from the Earth’s surface differently, creating a unique spectral signature for each gas. GHGSat’s constellation, which follows a sun-synchronous polar orbit to make use of consistent sunlight, is kitted out with spectrometers tuned to pick up the signature of methane. “It’s a bit like a prism,” he says. The backscattered light that enters a column of methane in the atmosphere is not the same as the light that exits it; that difference is used to determine how much of the gas is present in a given geographic area. (The equipment can, if needed, be adapted to parse out wavelengths from other gases, like nitrous oxide, which is even more potent than methane as a climate warmer over a 100-year period.)

McKeever does point out that other companies are developing or getting ready to deploy high-resolution methane tracking systems. “But we’re scaling up in a big way and improving the sensitivity to detect smaller and smaller leaks,” he says. “Even if others start doing what we’re doing, we’re years ahead of their game.”

This is what has piqued the interest of external investors. Tom Ingersoll, a managing partner with New York–based Space Capital, which invests in space technology companies at the early stages, was an adviser to GHGSat and an early member of the board of directors. “I worked with Stephane sometime around 2016 or 2017 on securing Series A funding,” he says. “I’m impressed by the company’s wise deployment of capital, and I’m not worried about timing—it’s not about going fast; it’s about going well,” he adds, alluding to the careful development and fine-tuning not only of the technology but also of the company itself. He won’t disclose how much Space Capital has invested. But the total for the Series A2 funding round, which came through in 2018 and included the Business Development Bank of Canada and Schlumberger, was US$10 million. Space Capital also pitched in with Series B funding in 2020-21 alongside Investissement Québec and OGCI Climate Investments for a total of US$45 million. He’s confident GHGSat will be able to manage growth. “But they also need to be able to manage the business model—money for data.”

At the moment, GHGSat is the only private company in the world to commercialize high-resolution measurements of emissions from space. (The company also does aerial surveys.) Anna Lynch, vice-president of analytics, describes the company as a provider of “ground truth that simply didn’t exist before.” Her job is to understand the various markets—regulators, industry, investors—and pull together the emissions information that meets a particular client’s needs. “The key thing is, data is data,” she says via Zoom from the Ottawa office. “But what do people need the data for? What do they need to make decisions? It’s all in how we aggregate it and how we alert different clients.”

Using its own sensor data as well as third-party public data—including measurements from the European Space Agency’s Sentinel-5P satellite, which captures a larger geographic area but offers a coarser image of emissions—GHGSat sells different subscriptions and custom packages. An oil company working toward reducing its carbon footprint and reaching ESG goals needs to be able to attribute an emission to an individual facility and source (a flare, a compressor area or a well). With that data, GHGSat can aggregate facility-only information or data for a company’s full slate of operations. A subscription can be for, say, twice-monthly, monthly or quarterly reports plus alerts, or for a single measurement of a site to verify that a plugged leak has indeed been fixed. The common denominator for these products is how clients access the aggregated data. Developed by GHGSat, the online platform Spectra, as it’s called, allows them to view data pertaining to their operations, with images, graphs and statistics. A methane flare will appear as a yellow circle or, if it’s an emission, as a red triangle.

Financial clients, on the other hand, don’t need the same complexity to verify a corporation’s sustainability performance. “Investors and hedge funds might be deciding whether they’ll invest in a company that has set a goal of net-zero emissions; the data we provide shows whether the company is tracking toward that plan,” says Lynch. Governments, on the other hand, might look for regional, national and global emissions and trends over time, or data that demonstrates compliance with environmental regulations and climate commitments. (Canada is set to introduce mandatory environmental, social and governance reporting for federally regulated financial institutions in 2024; this could include numbers on methane emissions for corporations included in investment products.) In Ingersoll’s view, governments need to do more; they need to start demanding empirical emissions data from industry, because “you can’t manage a problem you don’t understand. Something like GHGSat is fundamental to this change.”

You only need to look up on a clear night to see that the Earth’s orbit is full of satellites. Since GHGSat’s successful May launch, six of those form part of the company’s current constellation, with four more scheduled for deployment by the end of 2023. A total of 10 satellites is a trifling number among the nearly 4,900 active ones circulating the planet. But GHGSat’s tiny specks—the buses are about the size of a two-four of beer and weigh around 15 kilograms each—could make a big difference for the future of life as we know it on Earth.

This satellite will self-destruct (but not really—it's only a gag)

There are five main naturally occurring greenhouse gases: water vapour, CO2, methane, nitrous oxide and ozone. Each of these trap solar radiation in the atmosphere, creating the greenhouse effect that makes our planet habitable (without it, Earth would be too cold). But since the Industrial Revolution, CO2 alone has nearly doubled, from 280 parts per million pre-industrialization, to 420 ppm today. More greenhouse gases in the atmosphere means more heat is trapped, increasing the global temperature, which in turn melts sea ice, causing dark ocean surfaces to absorb more heat, and thaws permafrost, releasing previously locked-away carbon.

Of the main GHGs, carbon dioxide is the most abundant—the U.S. Environmental Protection Agency reported that in 2017, it made up 79% of total GHG emissions in the U.S. and 76% globally. But methane is more than 25 times more potent as a heat-trapper than CO2 over 100 years and some 80 times stronger over the 20 years following an emission. That’s why the UN, scientists and regulators are urging the world to speed up the pace at which they reduce emissions of the gas. Methane is estimated to account for 30% of the climate warming seen since the Industrial Revolution, and atmospheric methane last year reached nearly 1,900 parts per billion, about 162% above pre-industrial levels. About a quarter of anthropogenic methane emissions come from oil and gas, with mines, landfills and feedlots making up most of the rest. So ahead of the November 2021 COP 26 climate summit in Glasgow, the UN Environment Programme launched the Global Methane Pledge. To date, 125 countries have agreed to voluntarily cut methane emissions by at least 30% from 2020 levels by 2030. At the same time, UNEP also initiated the International Methane Emissions Observatory to gather and verify global numbers on the gas. GHGSat was one of the first contributors of data to the initiative.

“GHGSat has the potential to change our understanding of methane emissions,” says Evan Sherwin, an energy and climate policy analyst at Stanford University. He started collaborating with the company in 2021 on several controlled methane leaks, where a few hundred kilograms per hour were released to test its tech and make sure measurements were accurate. (In contrast, the Turkmenistan mess at times spewed 10 tonnes per hour.) GHGSat’s targeted satellites, he says, are an important complement to measurements from planes and drones, and by ground sensors. He refers to an aerial survey of the Permian Basin in Texas and New Mexico, one of the planet’s most productive oil fields. Carried out by Kairos Aerospace, a California-based provider of aerial methane detection, the survey picked up fugitive emissions amounting to nearly 10% of total gas production in the Basin in 2019. While that kind of survey is clearly useful, it can only capture a fraction of global sites. GHGSat adds a crucial layer in the climate-change fight: ongoing high-level sensitivity anywhere in the world. “We need rapid screening technology and continuous monitoring to learn where emissions take place and how big they are,” says Sherwin. “With that data, we can reduce emissions by an order of magnitude.”

Remote sensing from space changes climate accountability because finding and plugging methane leaks is one of the swiftest ways to mitigate climate warming. This reality isn’t lost on the 12-member Oil and Gas Climate Initiative (OGCI). Including giants Shell, Petrobras, ExxonMobil and Aramco, it churns out 30% of global oil and gas production. In 2016, two years after inception, it created OGCI Climate Investments, which since 2017 has made 29 investments in carbon-reduction technologies and projects, including GHGSat. As chief investment officer Josh Haacker says, “We have to solve methane to meet the 1.5°C target” in the Paris Agreement. (Besides, a peer-reviewed study published in Science magazine in September on a University of Michigan study shows that flaring emits much more methane than previously thought.) So in 2018, the US$1.1-billion fund supported GHGSat’s Series A2 fundraising, and helped close Series B. And 10 of the 12 OGCI members are currently, or have been, clients of GHGSat. While Haacker admits zero methane for OGCI’s members may not be realistic, not trying is not an option. But it isn’t only about being a responsible corporate citizen. “As investors, we’re also looking for solutions that have financial applicability, and GHGSat is uniquely positioned for growth,” Haacker says. “It controls the only privately owned satellites in use today for remote sensing of methane emissions and has seen substantial sales growth in recent years, so the value proposition is clear.”

Embroidered patches commemorate each of the company’s satellite launches

Exactly how substantial that growth has been is anyone’s guess; much like GHGSat guards its tech secrets, it also won’t divulge financials. “But in the past year,” says Rodrigue, the CFO, referring to the time between August 2021 and August 2022, “revenues increased by a factor of 2.5.” At the same time, the company added about 35 employees, up from around 70 at the beginning of that 12-month cycle. By November of this year, the number had grown to about 115. The firm has signed a US$7-million, five-year agreement with NASA—a new client—to provide high-resolution Earth observation data to boost the agency’s own science-based work and data collection. It recently partnered with the Kingdom of Bahrain to provide data that will help the nation and its oil and gas holding company reduce methane emissions by 30% by 2030. And it has another three satellites, on top of the six currently in orbit, under construction by global tech company ABB in Quebec City (the plant has been specializing in space-based optical sensors for atmospheric, weather and Earth observations for the past three decades). To pay for further expansion, Rodrigue says Series C fundraising will be closing this month, capital the company will need if it’s to keep scaling up and adding satellites. Each one costs “more than $1 million but less than $10 million” to build, per Rodrigue, and, according to SpaceX’s calculator, roughly $300,000 to launch with SpaceX’s rideshare program, which bases its price on the payload weight, the launch date and the desired orbit for delivery.

When Germain first started dreaming about launching a space company, there was no ridesharing service for getting into orbit. But at the livestreamed rocket launch in Montreal in May, the crowd seemed oblivious to that not-too-distant fact. What mattered was the future. As Luca, Penny and Diako—all of GHGSat’s satellites are named for staff members’ children—popped into space, champagne corks went flying, too. Diako’s mother (she was in the room with her son; Penny was there, as well) put it this way: “The work of the company gives hope, which is especially important having a small child.” Her sentiment mirrors one of the company’s important corporate goals. “We want to have a massive impact, to have an environmental activist role, as we continue with our rapid expansion,” says Germain. GHGSat is simultaneously working on being down-to-Earth and aiming for orbital domination.

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