Oil & Energy
Why The Energy Sector Is Avoiding Full Emissions Disclosure
The tracking and disclosure of carbon dioxide emissions is at the heart of the energy transition as the first step towards reducing these same emissions. Yet for all the regulatory and activist effort to pressure businesses into full emissions disclosure, it has been tricky, because companies don’t want full emissions disclosure.
A recent study from ESG data provider Clarity AI has revealed that only a tenth of energy companies disclose emissions generated from oil and gas projects in which they participate as investors rather than operators.
The study used data from emission tracker Climate TRACE to show that the great majority of the 20 largest oil and gas companies in the world did not report so-called investment Scope 3 emissions, suggesting this could be problematic for investors.
Scope 3 emissions are the bane of companies’ existence in the current regulatory environment that has prioritized carbon dioxide emissions almost above all else. The pressure to track and report all scopes of emissions is enormous but it is particularly significant in Scope 3: the indirect emissions a company gets on its “bill” from working with suppliers and selling products to clients.
Now, per that Clarity AI study, it emerges that Scope 3 emissions are also the ones generated from projects where companies are only an investor—and they, too, need to be tracked and reported. The idea appears to be that no single molecule of CO2 should go unreported in order to arrest changes in the Earth’s climate.
For obvious reasons, oil and gas companies have been an especially big focus of Scope 3 emission disclosure and reduction efforts due to the nature of their activity, which abounds with all sorts of emissions. For equally obvious reasons, this focus has not made the industry happy, with the general argument being that responsibility for the emissions generated from the use of hydrocarbon products lies with everyone who uses them rather than the ones who produce them.
The reason that oil and gas companies do not want to report their Scope 3 emissions is pretty much the same as the reason for all other companies to be reluctant to do that — the massive amount of resources that would need to go into tracking all indirect emissions a company’s activities produce.
Tracking Scope 3 would involve tracking absolutely every step of the way that a product — or a service — passes from inception to market and that is one quite long way.
The argument of transition advocates is that investors are interested in this sort of information because it helps them make better informed decisions as they increasingly bet on a transition economy. Failing to report Scope 3 emissions, the argument goes, essentially means misleading investors.
Not everyone agrees that reporting all CO2 emissions to the last molecule is all that important, however. “Companies don’t have the incentive to report everything, … just because they don’t have the means to, or haven’t been able to measure it,” said Patricia Pina, the head of Clarity AI’s product research and innovation, told Inside Climate News.
Indeed, some transition advocates attach zero importance to detailed emission reporting, instead prioritizing direct and “decisive” decarbonization.
Commenting on the study to Inside Climate News, the head of the Erasmus platform for sustainable value creation at Ereasmus University in Rotterdam said that while it is understandable why oil and gas companies might not be enthusiastic about Scope 3 reporting, “we don’t really need them to do that. We need them to transition decisively to net zero and to invest massively in renewable energy”.
It appears, then, that not everyone in the pro-decarbonization camp feels equally strongly bout indirect emissions, specifically from investments. Yet the issue could yet become problematic for energy companies if enough pro-transition investors take it to heart as they did all other Scope 3 emissions.
On the flip side, climate-related shareholder resolutions have seen a decline in shareholder support over the past couple of years, which might suggest that investor interest in emissions, direct or indirect, is waning, replaced by things like returns.
This waning interest has coincided with companies beginning to revise their climate commitments, including emission reporting.
The latter trend was detected by the Energy Institute in its latest Statistical Review of World Energy, which revealed that the commitments companies made years ago were unrealistically ambitious.
In a sense, the corporate world woke up to the reality that lightning fast decarbonization is physically impossible and likely financial undesirable.
“Everyone got swept up in a wave of enthusiasm”, the head of sustainable investing research at one Dutch asset manager told the FT last month. “The reality is not so easy”.
Indeed, it appears that enthusiasm for everything from wind and solar to Scope 3 emissions reporting is weakening, to be replaced by a more level-headed approach to energy and corporate management.
By: Irina Slav
The Nigerian Navy Units under the auspices of Operation Delta Sanity says it has recorded significant successes against crude oil theft and illegal refining sites in the Niger Delta.
The Navy, in an updated operations, said the successes were recorded between Thursday August 29 and Monday September 2, 2024.
According to the information, on 29th August, seven large cotonou and two fibre boats operated by heavily armed oil thieves loading crude oil from an illegal loading point around Botokiri axis of Nembe Local Government Area of Bayelsa State were seized.
Also, on 31st August, six suspected crude oil thieves with 109 sacks of illegally refined petroleum products, four fibre boats and two wooden boats were arrested and seized along Ogboinbiri-Kasama-Azama-Isoni of Bayelsa State.
Again, on 1st September, two wooden boats and 328 sacks of illegally refined automated Gas Oil were seized at Otuogori community’s river bank in Yenagoa, Bayelsa State.
Additionally, on 2nd September, 35 sacks of illegally refined Automotive Gas Oil in a wooden boat were seized at Gbaraun area of Southern Ijaw Local Government Area of Bayelsa State.
These successes indicate the effectiveness of Operation Delta Sanity, and the resolve of the Nigerian Navy to sustain current efforts to rid Nigeria’s maritime environment of the menace of crude oil theft and enhance crude oil production for the overall growth of the economy.
The Eko Electricity Distribution Company Plc. has clarified that the Ministries, Departments, and Agencies of the Federal Government, including the military, owed the power distribution company N42billion as the cost of electricity consumed and not N144billion.
The Bureau of Public Enterprise(BPE), disclosed this in a Statement signed by the Head, Public Communications, Amina Othman, at the Weekend.
According to the Statement, the Disco affirmed that its total outstanding debt was N144billion, of which the MDAs and the military owe N42billion.
“The Eko Electricity Distribution Company Plc has clarified that contrary to earlier reports, the aggregate outstanding debt owed by consumers is N144billion, out of which, ministries, departments, and agencies including the military owe N42billion”, Othman stated.
The Statement said this was against prior reports that the MDAs, including the army, police, and other government agencies, were owing N144billion and had refused to pay.
The Disco said, “the clarification became necessary for proper reportage on the matter and to put the records straight”, it stated.
Recall that during a recent oversight visit by members of the House of Representatives Committee on Privatisation and Commercialisation, led by its Chairman, Ibrahim, the Acting Managing Director of the EKEDC, Mrs. Rekhiat Momoh, among other things, informed the members about the legacy debts owed the company by MDAs.
The committee had reported the acting MD as stating that the company was owed N144billion by MDAs within its operational area, saying she mentioned that the military, police, and various state government agencies failed to settle their debts, creating financial difficulties for the distribution company.
Energy infrastructure, a crucial part of global oil and gas supply and the energy transition, are set to get a boost after a heavy lifting equipment provider unveiled the world’s strongest crane-equipment capable of lifting 6,000 tons, or 15 fully loaded Boeing 747 aircraft.
Dutch heavy lifting and transport services company Mammoet has launched a new type of crane, the SK6,000, which, the firm said, could be used for modules to be built faster and also “bigger than ever before”.
As oil and gas continue to be a key part of the world’s energy system—and likely will continue for decades to come—and as renewable energy developers aim for bigger wind turbines, the support equipment for installing oil and gas platforms, offshore wind equipment, and even nuclear power stations is becoming bigger.
Bigger cranes such Mammoet’s SK6,000 could remove some of the limitations of engineering and construction firms. These firms are generally limited by how much weight can be lifted when installed on a platform or turbine.
Cranes that can carry 5,000 tons and more can shorten the time of a project being erected on a site, onshore or offshore, Mammoet says.
“Limitations on lifting capacity force engineers to fabricate smaller modules than would be optimal; tying up site space and increasing the complexity and duration of projects,” the company notes.
“This limitation can also narrow the execution choices available during each project’s planning stage and the percentage of each project that can be executed locally.”
These days, energy companies and their contractors seek faster deployment of energy infrastructure, be it wind turbines or floating production storage and offloading (FPSO) vessels and platforms for oil and gas production.
“There are so many supply chain constraints at the moment that need to be de-bottlenecked,” Gavin Kerr, Mammoet’s director of global services, told Bloomberg, commenting on the new crane.
“The bigger everything gets, you need bigger cranes.”
Moreover, the SK6,000 is containerised and can be assembled quickly on-site. This feature allows it to deliver heavy lift capability wherever it is needed, giving contractors greater flexibility in where and how energy projects are completed” Mammoet said.
“With the innovation of the SK6,000 crane, our customers can think bigger than ever before; pushing modules beyond the 4,000t and even 5,000t barriers. Its low ground bearing capacity also means the crane can be used all over the world”, said Mammoet’s Sales Director Giovanni Alders.
“With its long outreach, small minimum footprint and relatively small site impact, the SK6,000 greatly reduces the topside integration time.
“Needless to say, with larger building blocks you spend less time connecting and testing, and more time producing” Alders added
Energy companies do need faster permit-to-production times in both oil and gas and renewable energy to provide the conventional and green energy sources the world will need.
Wind turbine technology is evolving and making the hub height increasingly taller. According to the Office of Energy Efficiency & Renewable Energy at the U.S. Department of Energy, the hub height for utility-scale land-based wind turbines has surged by 83per cent since 1998–1999, to about 103.4 meters (339 feet) in 2023. That’s taller than the statue of Liberty.
The average hub height for offshore wind turbines in the United States is projected to grow even taller from 100 meters (330 feet) in 2016 to about 150 meters (500 feet), or about the height of the Washington Monument, in 2035, DOE said.
In the oil and gas industry, new resource development is needed as demand for LNG grows and legacy oilfields mature and output declines.
If contractors can bring energy projects on stream faster, both oil and gas supply and the energy transition will benefit.
By: Charles Kennedy