Oil & Gas Scope 1, 2, 3 Emissions

The need to determine a company’s greenhouse gas (GHG) emissions has become a mandatory task for all oil and gas (O&G) operators. Current regulations only require annual reporting of direct GHG emissions from a company’s operations. With the advent of more Environment, Social and Governance (ESG) scoring of companies, there is a need to calculate all emissions associated with a company’s operations. The ESG score for a company is partly determined by the following categories of GHG emissions:

  • Scope 1: Direct emissions
  • Scope 2: Indirect emissions from energy consumption
  • Scope 3: Other indirect emissions

Image location: https://www.epa.gov/climateleadership/scope-1-and-scope-2-inventory-guidance

The need to determine Scope 1, 2 and 3 emissions is also driven by proposed U.S. Securities and Exchange Commission (SEC) regulations requiring disclosure of GHG emissions by publicly traded companies. The SEC will also propose regulations for how ESG investment funds will prove claims of being environmentally friendly.

 

Oil and Gas Scope 1 Emissions

Scope 1 emissions for O&G operations include direct emissions from company operations. This includes equipment that combusts fuel (natural gas, diesel, gasoline) and equipment that emits methane to the atmosphere. Methods to determine Scope 1 emissions are well defined by the U.S. Environmental Protection Agency (EPA) and the American Petroleum Institute (API).

Examples of O&G Scope 1 direct emissions are:

  • Fuel combustion from facility stationary engines, turbines, heaters, reboilers, boilers and flares.
  • Venting of methane from storage tanks, glycol dehydrators, blowdown vents, fugitive emissions (valves, connections, seals, etc.), pneumatic devices and pumps, and pipelines.
  • Venting of carbon dioxide from gas sweetening units.
  • Fuel combustion from mobile sources such as company pumper vehicles serving and operating wells and facilities.
  • Fuel combustion from company nonroad engines such as cherry pickers, manlifts, tractors.

 

Oil and Gas Scope 2 Emissions

Scope 2 emission for O&G operations are indirect emissions from purchased electricity, heat and steam. Guidance for Scope 2 electricity generation emissions is available from the EPA’s Center for Corporate Climate Leadership.

Examples of Scope 2 emissions are:

  • Electricity purchased for company offices, field offices, shorebases.
  • Electricity purchased for production facilities (wells, pump jacks, compressor stations, etc.)

 

Oil and Gas Scope 2 Emissions

Scope 3 value chain emissions result from use of sold products, product transport, employee business travel and employee commuting.

For the O&G industry product sold, this includes:

  • Gasoline and diesel fuel refined from crude oil
  • Natural gas used as fuel by utilities, businesses and homeowners

Scope 3 value chain emissions are not straightforward to estimate because one company’s Scope 1 and 2 emissions is another company’s Scope 3 emissions. The concern for this is double counting of emissions. Defining the boundary for an O&G company’s Scope 3 value chain emission is one major issue. Some expect that the coming U.S. Securities and Exchange Commission’s (SEC) Climate Disclosure (proposed in March 2022) will include guidance on determining Scope 3 emissions for the O&G industry.

IPECIA has guidance for calculating Scope 3 emissions for the O&G industry. General Scope 3 guidance can be found in the The Greenhouse Gas Protocol document, “The Corporate Value Chain (Scope 3) Accounting and Reporting Standard.”

 

Comparison to EPA GHG Reporting

U.S. Environmental Protection Agency (EPA) regulations require facilities that emit greater than or equal to 25,000 metric tons of GHGs (CO2e) to report their annual GHG emission to the EPA’s e-GGRT system. For O&G production facilities and O&G gathering and boosting stations, emissions from EPA specified “Basins” are aggregated to determine if reporting is required. For gas processing and gas transmission facilities, reporting is at the individual facility level. These rules are found in 40 CFR 98.

The EPA required reporting does not include all O&G facilities since facilities emitting less than 25,000 metric tons CO2e are exempt from reporting. Also, EPA reporting only requires reporting of part of a company’s Scope 1 GHG emissions. EPA reporting does not include direct emissions from company vehicles used by operations personnel to operate wells and facilities and nonroad engines (e.g., manlifts). No Scope 2 or 3 emissions included in EPA mandatory reporting rules.

 

Summary and Conclusions

The need to determine GHG emissions based on ESG Scope 1, 2 and 3 categories has grown into a requirement driven by environmental regulations, investors and social media considerations. Scope 1 emissions are direct emissions from a company’s operations. Scope 2 emissions are for purchase electricity, heat, and steam. Scope 3 are value chain emissions that result from use of soled products.

Companies should calculate emissions from all of their operations for Scope 1 and 2 categories. When the SEC Climate Disclosure rules are finalized, and Scope 3 guidelines are known, then Scope 3 emissions could be determined.

 

Cimarron – Who We Are

Cimarron’s overall goal is to reduce greenhouse gas emissions for all industries as we work with our clients to create a cleaner environment.

The company engineers and manufactures environmental, production and process equipment for the upstream, midstream and downstream energy industries, as well as environmental control solutions for biogas at wastewater facilities, digester tanks and landfills.

Our BTEX Eliminator, flares and ECDs meet all federal and state environmental regulatory requirements for control efficiency and destruction efficiency.

Cimarron offers our customers the know-how and environmental expertise to meet the environmental standards of today and tomorrow. Cimarron is committed to bring value to the Energy industry and their shareholders based on our financial strength, experienced personnel, and engineering capabilities.

As a company, we thrive every day to make a difference through innovation (e.g. ESG), customer focus, and operational efficiency. In addition to being present in all major regions in the US, Cimarron serves more than 45 countries around the world, ranging from offshore to desert. From key operational centers in the United States, Italy and the United Arab Emirates, Cimarron offers ongoing service and support through its own field service personnel and strategic third-party partners, creating a cleaner environment for our customers and their shareholders.

Since its founding in the mid-1970’s in Oklahoma, the company’s product offering has expanded from production equipment to include the largest line of environmental solutions that capture or incinerate fugitive vapors. With the acquisitions of HY-BON/EDI in 2019 and AEREON (including Jordan Technologies) in 2020, Cimarron has added strong brands, products, and services to its portfolio.

Please contact us to learn more about our products and services and about all our ESG solutions at sales@cimarron.com or visit our website www.cimarron.com.

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  113. {Tôi đã rất hài lòng để tìm thấy trang web này. Tôi cần cảm ơn bạn {vì đã|dành thời gian cho|chỉ vì điều này|vì điều này|cho bài đọc tuyệt vời này!! Tôi chắc chắn thích thú từng một chút nó và tôi đã đánh dấu trang để xem thông tin mới trên blog của bạn.|Tôi có thể chỉ nói rằng thật thoải mái để tìm thấy một cá nhân mà thực sự biết họ là gì thảo luận trên internet. Bạn chắc chắn biết cách đưa một vấn đề ra ánh sáng và làm cho nó trở nên quan trọng. Nhiều người hơn nên đọc điều này và hiểu khía cạnh này của. Tôi đã ngạc nhiên bạn không nổi tiếng hơn cho rằng bạn chắc chắn sở hữu món quà.|Rất tốt bài đăng. Tôi chắc chắn đánh giá cao trang web này. Cảm ơn!|Thật gần như không thể tìm thấy những người có kinh nghiệm về điều này, nhưng bạn có vẻ bạn biết mình đang nói gì! Cảm ơn|Bạn nên là một phần của một cuộc thi dành cho một trang web trên internet hữu ích nhất. Tôi sẽ khuyến nghị blog này!|Một cuộc thảo luận thú vị chắc chắn đáng giá bình luận. Tôi nghĩ rằng bạn nên viết thêm về chủ đề này, nó có thể không là một điều cấm kỵ vấn đề nhưng điển hình mọi người không thảo luận chủ đề như vậy. Đến phần tiếp theo! Cảm ơn rất nhiều!|Xin chào! Tôi chỉ muốn cho bạn một rất to cho thông tin tuyệt vời bạn có ở đây trên bài đăng này. Tôi sẽ là trở lại blog của bạn để biết thêm thông tin sớm nhất.|Sau khi tôi ban đầu để lại bình luận tôi có vẻ như đã nhấp vào hộp kiểm -Thông báo cho tôi khi có bình luận mới- và từ bây giờ mỗi lần được thêm vào tôi nhận được 4 email có cùng nội dung. Có lẽ có một cách bạn có thể xóa tôi khỏi dịch vụ đó không? Cảm ơn rất nhiều.|Lần sau nữa Tôi đọc một blog, Hy vọng rằng nó không làm tôi thất vọng nhiều như bài này. Rốt cuộc, Vâng, đó là sự lựa chọn của tôi để đọc hết, dù sao thì tôi thực sự nghĩ bạn sẽ có điều gì đó thú vị để nói về. Tất cả những gì tôi nghe được là một loạt phàn nàn về điều gì đó mà bạn có thể sửa nếu bạn không quá bận tìm kiếm sự chú ý.|Đúng với bài viết này, tôi thực sự nghĩ trang web này cần nhiều hơn nữa sự chú ý.

  114. {Tôi đã hạnh phúc hơn cả vui khám phá trang web này. Tôi muốn cảm ơn bạn {vì đã|dành thời gian cho|chỉ vì điều này|vì điều này|cho bài đọc tuyệt vời này!! Tôi chắc chắn yêu thích từng của nó và tôi cũng đã đánh dấu trang để xem thông tin mới trong trang web của bạn.|Tôi có thể chỉ nói rằng thật thoải mái để khám phá một cá nhân mà thực sự biết họ là gì thảo luận trên mạng. Bạn thực sự hiểu cách đưa một vấn đề ra ánh sáng và làm cho nó trở nên quan trọng. Nhiều người hơn nữa phải đọc điều này và hiểu khía cạnh này câu chuyện của bạn. Tôi đã ngạc nhiên rằng bạn không nổi tiếng hơn vì bạn chắc chắn có món quà.|Rất hay bài viết trên blog. Tôi hoàn toàn yêu thích trang web này. Tiếp tục làm tốt!|Thật khó tìm những người có kinh nghiệm về điều này, nhưng bạn có vẻ bạn biết mình đang nói gì! Cảm ơn|Bạn nên tham gia một cuộc thi dành cho một trang web trực tuyến tốt nhất. Tôi sẽ Rất khuyến nghị blog này!|Một hấp dẫn chắc chắn đáng giá bình luận. Tôi nghĩ rằng bạn nên xuất bản thêm về vấn đề này, nó có thể không là một điều cấm kỵ vấn đề nhưng thường xuyên mọi người không nói về vấn đề những điều này. Đến phần tiếp theo! Chúc mừng.|Xin chào! Tôi chỉ muốn đề nghị rất to cho thông tin tuyệt vời bạn có ở đây trên bài đăng này. Tôi đang quay lại blog của bạn để biết thêm thông tin sớm nhất.|Sau khi tôi ban đầu bình luận tôi có vẻ như đã nhấp vào hộp kiểm -Thông báo cho tôi khi có bình luận mới- và từ bây giờ mỗi lần được thêm vào tôi nhận được bốn email cùng chính xác một bình luận. Có lẽ có một cách bạn có thể xóa tôi khỏi dịch vụ đó không? Cảm ơn rất nhiều.|Lần sau nữa Tôi đọc một blog, Tôi hy vọng rằng nó sẽ không thất bại nhiều như bài này. Rốt cuộc, Tôi biết điều đó là sự lựa chọn của tôi để đọc hết, tuy nhiên tôi thực sự tin bạn sẽ có điều gì đó hữu ích để nói về. Tất cả những gì tôi nghe được là một loạt phàn nàn về điều gì đó mà bạn có thể sửa nếu bạn không quá bận tìm kiếm sự chú ý.|Đúng với bài viết này, tôi thành thật tin trang web này cần nhiều hơn nữa sự chú ý.

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