Meeting Increasing Demands for Upstream Scope 3 Reporting: A Framework for the Drilling Industry

Abstract

Summary This paper details the scope and framework applied for quantifying upstream Scope 3 greenhouse gas (GHG) emissions of offshore drilling operations. A step-by-step methodological approach is presented, comprising environmental impact modeling of drilling and rig operational activities through the application of the life cycle assessment (LCA) methodology. The study aims to break down upstream Scope 3 emissions to a process level, demonstrating how upstream Scope 3 emissions can be quantified and evaluated to a greater detail level compared with what current Scope 3 reporting levels offer today. A North Sea drilling case study conducted in collaboration with a major drilling contractor is used for showcasing the impact burden levels, challenges, and prosperity of accounting, reporting, and tracking upstream Scope 3 emissions as a drilling contractor. A total of 141 drilling and rig operational activities were identified and prioritized for impact calculation, presenting a detailed breakdown of upstream Scope 3 emissions results for offshore well drilling. Impacts are quantified in tonnes of carbon dioxide equivalent (CO2eq.) emitted per day in operation. The study does not include downstream Scope 3 and reports limited to direct (Scope 1) emissions. Results show a total upstream Scope 3 emissions burden of 412 tCO2eq./d in operation. Of the eight assessed upstream Scope 3 categories, purchased goods account for the largest contribution of 32%. Activities related to the operation and maintenance of drilling equipment account for the largest impact contribution of 351 tCO2eq./d, corresponding to 86% of total upstream Scope 3 emissions. The reported outputs may serve as a benchmark for future Scope 3 accounting and reporting within the drilling industry, as well as for LCA inventories for oil and gas production. A set of system boundaries for assessing upstream Scope 3 emissions is suggested, along with recommended emission calculation methods. The presented framework may serve as an alternate supplement to the International Petroleum Industry Environmental Conservation Association (IPIECA) adapted version of the GHG Protocol’s Scope 3 Standard in terms of Scope 3 inventory boundary setting and data prioritization with relevance to drilling contractors, and finally to the International Association of Drilling Contractors (IADC) industry guideline for environmental, social, and governance (ESG) reporting.