What is best practice greenhouse and energy reporting in the oil and gas industry?

Abstract

The upstream oil and gas industry is diverse and many of the assets are geographically dispersed in offshore and onshore locations. The first year of National Greenhouse and Energy Reporting (NGER) in the 2009 financial year (FY09) challenged the industry to come to terms with complex issues such as the reporting structure, defining facilities, determining appropriate reporting methodologies, determining incidental emissions, obtaining contractor emissions and considering uncertainty estimates. This paper will explore the range of industry responses during FY09 and will be accompanied by a case study from Santos Limited to illustrate the journey. In responding to NGER requirements in FY09, the oil and gas industry was required to absorb many new legislative compliance obligations. At a company level, difficult decisions had to be made about the allocation of resourcing for NGER preparation and response. Companies were also faced with financial implications of the reported data, because that data would underpin permit liability under the proposed Carbon Pollution Reduction Scheme (CPRS). Going forward, a key optimisation challenge for FY10 and beyond is the management and use of the NGER data. This paper will cover the processes and systems used to collect and report data and how the use of that data for organisational decision making will all be an important optimisation consideration in a CPRS environment. The paper will also explore other NGER reporting issues for the oil and gas industry, such as: arrangements with stakeholders, such as joint venture parties, partners and contractors; selection of measurement methods, including complexities with venting, flaring and other fugitive emissions; availability of appropriate measurement equipment; issues with reporting of own-use emissions and intermediate energy use and production; and, measurement of exploration activities. These issues are likely to present an optimisation challenge to many in the industry during FY10 and beyond. The paper will then conclude with a case study by Santos Limited.