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
Nigeria’s losses due to crude oil theft has been said to be more significant than those of some other members of the Organisation of Petroleum Exporting Countries(OPEC).
The Chairman, Senate Ad- hoc Committee on Crude Oil Theft, Senator Ned Nwoko, made this known in an interview with newsmen in Abuja.
Nwoko noted with dismay the detrimental impact of the issue, which, he said include economic damage, environmental destruction, and its impact on host communities.
According to him, the theft was not only weakening the Naira, but also depriving the nation of vital revenue needed for infrastructure, healthcare, education and social development.
The Senator representing Delta North Senatorial District described the scale of the theft as staggering, with reports indicating losses of over 200,000 barrels per day.
Nwoko disclosed that the ad hoc committee on Crude Oil Theft, which he chairs, recently had a two-day public hearing on the rampant theft of crude oil through illegal bunkering, pipeline vandalism, and the systemic gaps in the regulation and surveillance of the nation’s petroleum resources.
According to him, the public hearing was a pivotal step in addressing one of the most pressing challenges facing the nation.
‘’Nigeria loses billions of dollars annually to crude oil theft. This is severely undermining our economy, weakening the Naira and depriving the nation of vital revenue needed for infrastructure, healthcare, education, and social development.
‘’The scale of this theft is staggering, with reports indicating losses of over 200,000 barrels per day more than some OPEC member nations produce.
‘’This criminal enterprise fuels corruption, funds illegal activities and devastates our environment through spills and pollution.
‘’The public hearing was not just another talk shop; it was a decisive platform to uncover the root causes of crude oil theft, bunkering and pipeline vandalism.
‘’It was a platform to evaluate the effectiveness of existing surveillance, monitoring, and enforcement mechanisms; Identify regulatory and legislative gaps that enable these crimes to thrive.
‘’It was also to engage stakeholders, security agencies, host communities, oil companies, regulators, and experts to proffer actionable solutions; and strengthen legal frameworks to ensure stricter penalties and more efficient prosecution of offenders”, he said.
Nwoko noted that Nigeria’s survival depended
Shell Nigeria Exploration and Production Company Ltd. (SNEPCo) has called on Nigerian companies to position themselves strategically to take full advantage of the growing opportunities in upcoming offshore and shallow water oil and gas projects.
The Managing Director, SNEPCO, Ronald Adams, made the call at the 5th Nigerian Oil and Gas Opportunity Fair (NOGOF) Conference, held in Yenagoa, Bayelsa State, last Thursday.
Adams highlighted the major projects, including Bonga Southwest Aparo, Bonga North, and the Bonga Main Life Extension, as key areas where Nigerian businesses can grow their capacity and increase their involvement.
“Shell Nigeria Exploration and Production Company Ltd. (SNEPCo) says Nigerian companies have a lot to benefit if they are prepared to take advantage of more opportunities in its offshore and shallow water oil and gas projects.
“Projects such as Bonga Southwest Aparo, Bonga North and Bonga Main Life Extension could grow Nigerian businesses and improve their expertise if they applied themselves seriously to executing higher value contracts”, Adams stated.
Adams noted that SNEPCo pioneered Nigeria’s deepwater oil exploration with the Bonga development and has since played a key role in growing local industry capacity.
He emphasized that Nigerian businesses could expand in key areas like logistics, drilling, and the construction of vital equipment such as subsea systems, mooring units, and gas processing facilities.
The SNEPCO boss explained that since production began at the Bonga field in 2005, SNEPCo has worked closely with Nigerian contractors to build systems and develop a skilled workforce capable of delivering projects safely, on time, and within budget both in Nigeria and across West Africa.
According to him, this long-term support has enabled local firms to take on key roles in managing the Bonga Floating, Production, Storage and Offloading (FPSO) vessel, which reached a major milestone by producing its one-billion barrel of oil on February 3, 2023.
The Emohua Local Government Area Administrator, Franklin Ajinwo, has pledged to improve electricity distribution in Oduoha Ogbakiri and its environs.
Ajinwo made the pledge recently while playing host in a courtesy visit to the Oduoha Ogbakiri Wezina Council of Chiefs, in his office in Rumuakunde.
He stated that arrangements are underway to enhance available power, reduce frequent outages, and promote steady electricity supply.
The move, he said, was aimed at boosting small and medium-scale businesses in the area.
“The essence of power is not just to have light at night. It’s for those who can use it to enhance their businesses”, he said.
The Administrator, who commended the peaceful nature of Ogbakiri people, urged the Chiefs to continue in promoting peace and stability, saying “meaningful development can only thrive in a peaceful environment”.
He also charged the Chiefs to protect existing infrastructure while promising to address the challenges faced by the community.
Earlier, the Oduoha Ogbakiri Wezina Council of Chiefs, led by HRH Eze Goodluck Mekwa Eleni Ekenta XV, expressed gratitude to the Administrator over his appointment and pledged their support to his administration.
The chiefs highlighted challenges facing the community to include incessant power outage, need for new transformers, and the completion of Community Secondary School, Oduoha.
The visit underscored the community’s expectations from the LGA administration.
With Ajinwo’s assurance of enhancing electricity distribution and promoting development, the people of Oduoha Ogbakiri said they look forward to a brighter future.
By: King Onunwor
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