Milan measures

Maureen Lorenzetti

Three major oil and natural gas organizations announced plans earlier this month to adopt new global guidelines for companies to use in voluntarily estimating and reporting greenhouse gas (GHG) emissions.

The groups made the announcement during international climate change discussions held in Milan as part of the United Nations Framework Convention on Climate Change. The American Petroleum Institute, the International Petroleum Industry Environmental Conservation Association (IPIECA), and the International Association of Oil and Gas Producers (IAOGP) spent nearly a year building industry consensus on the guidelines. They also met with other stakeholders, including environmentalists.

Big day
"This is a big day for oil and gas companies responsibly managing greenhouse gas emissions at operations worldwide," said Bob Greco, director of API's climate change program. "Unless we can accurately estimate and report greenhouse gases, it is impossible to know how successfully we are managing emissions. Now, the guidelines make it possible to monitor that progress."

API last February said its members' refineries would be 10% more energy-efficient by 2012 to meet the goals of a new White House voluntary GHG program (OGJ Online, Feb. 13, 2003).

API, IPIECA and IAOGP will make the guidelines publicly available Jan. 1, 2004, on their web sites.

In a similar effort, API and the Edison Electric Institute are expected to take an active role in a US Department of Energy plan to improve the accuracy of its voluntary GHG emissions reporting system. DOE issued the first part of its proposal detailing general guidelines last month; comments are due in February. The second half of the plan includes more technical issues and is expected out for public comment early next year. DOE hopes to have a final rule later in 2004.

Some environmentalists remain skeptical about DOE and API's efforts. The World Wildlife Fund, for example, suggested API's latest announcement is part of the "usual delaying tactics on capping emissions."

Encouraging steps
Other environmental groups praised API's guidelines, saying they were an important first step.

The World Resources Institute called the API plan "very positive" and said it "adds meat to the bone" of a concept first introduced by the group in 2001 in collaboration with the World Business Council for Sustainable Development. The two groups developed an international accounting system companies could use as a reference for reporting GHG emissions.

But nearly all environmentalists still want international consensus on a mandatory reporting system. They argue that outside the US, there is growing pressure by other governments and the business community to create an international framework that forces individual companies to be more transparent about both direct and indirect emissions.

"Governments that have ratified the Kyoto Protocol are already setting up systems to hold companies accountable for their total emissions," said Annie Petsonk, International Council for Environmental Defense. "Increasingly, large portfolio investors are also looking for information about companies' total emissions."

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