New GHG Emissions Dataset Provides Valuable Insight Into Oil & Gas Performance

Calculating the emissions performance of oil and gas operators — in absolute terms, and on an intensity scale — is much more than a baseline regulatory requirement in today’s market. And it will be central to their overall ‘ESG identity’ as 2022 progresses.

Global demand for secure, affordable, low emissions energy supply is rapidly increasing, and the industry is well positioned to meet it.

“Transparent and standardized emissions analysis is vital for the oil and gas industry as it seeks to meet anticipated demand and the expectations of governing bodies, financial institutions and consumers,” said Chris Wilson, managing director of Evaluate Energy.

“After extensive consultation with our clients, it became clear that there is a pressing need for a reliable, comparable and continually updated oil and gas data solution to measure progress on emissions reduction.”

Evaluate Energy this week released emissions data to assess the performance of oil and gas companies:

The data includes Scope 1 and Scope 2 emissions in absolute and intensity measures. The data is standardized to align with global emissions reporting taxonomies and presented within the Evaluate Energy database alongside financial and operating metrics. This allows users to examine emissions alongside production, reserves, revenue, cash flow, operating costs, capital investment and deal activity.

A two-minute video provides further details:

“The result is a data solution created by oil and gas specialists that can provide unparalleled access to global emissions data reporting and analysis,” added Wilson.

Evaluate Energy’s datasets help automate workflows for analysts to identify peer groups for benchmarking or to compare company performance over time. It also provides a baseline for deeper analysis on emissions.

“One of the major challenges in making comparisons is how emissions are ring-fenced and reported,” said Mark Young, senior oil and gas analyst at Evaluate Energy.  

Scope 1 covers direct emissions from owned or controlled sources. Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by a reporting company. Scope 3 includes all other indirect emissions that occur in a company’s value chain.

“This often creates a situation where you aren’t comparing apples to apples,” added Young. “For example, a natural gas-weighted company that owns its own processing infrastructure is going to report much higher Scope 1 emissions compared to a competitor that outsources processing to a midstream service provider that would classify its processing emissions as Scope 3.

“An operator that generates its own power to run field facilities will also have higher Scope 1 emissions than a competitor buying power from the grid that would classify these emissions as Scope 2.

“Analysts need to be aware of how emissions are classified and reported and do further research on the companies they are comparing to understand how effective each company is managing emissions. We are very well placed to help support this analysis.”

As industry further standardizes emissions reporting and reports on all types of emissions sources, it will be easier to make direct comparisons.

“Current datasets rely upon what is reported by companies and provide a starting point to quickly build out a more complete analysis based on an understanding of the limitations of the reporting frameworks,” said Wilson.

“It is also important to recognize that Scope 1 and Scope 2 emissions are only a small part of the industry’s emissions story. Scope 3 emissions — those emissions upstream in the supply chain from operators and downstream to the end use of hydrocarbons — account for almost 90 per cent of total emissions. Most companies are still working to better understand and report Scope 3 emissions. Ultimately those oil and gas suppliers with the lowest lifecycle emissions, along with competitive supply costs, will be well placed in the long term.”

Click here to view the new video that summarizes the emissions data:

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