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Oil and natural gas companies are evaluating options for reducing greenhouse gas (GHG) emissions, developing project plans, and implementing emission reduction projects either voluntarily or to comply with regulatory requirements. At the same time, various domestic and international organizations are developing guidance and procedures for quantifying, reporting, and registering project-level GHG emission reductions. This presents a challenge for oil and natural gas companies, where multi-national operations must be managed within a variety of GHG programs. Guidance is needed that is suitable for a broad range of climate change regimes or GHG registries and will serve the industry’s global operations. This document aims to provide this guidance by focusing on the technical aspects of reducing GHG emissions separate from the policy considerations.

Although the requirements for creditable emission reductions continue to evolve, the technical concepts associated with quantifying GHG emission reductions are grounded in the basic principles of completeness, consistency, accuracy, transparency, relevance, and conservatism. Key messages related to the technical focus of this document include recognition of the following:

• Determination of emission reductions should be based on generally accepted principles and sound technical considerations
• Reported information should provide a faithful, true, and fair account of the reductions achieved
• For existing operations, historical conditions, which are distinctly different from historical emissions, often provide the most realistic baseline scenario
• For new operations, common practice is generally an objective and credible prediction of what would have happened in the absence of the project
• Companies may wish to quantify GHG emission reductions for many reasons, thus methodologies for estimating and monitoring project reductions should be fit for their purpose
• Care must be taken in selecting the baseline scenario, particularly in the oil and natural gas industry, where differences in oil field characteristics, age and other factors must be considered
• Methods used to select, reject, or rank baseline scenarios based on financial analyses are not always objective
• Excessive monitoring requirements may discourage participation without improving measurement accuracy or reporting consistency

While individual and public policy decisions can have a very significant effect on the eligibility of GHG reductions for credits, actions that result in the reduction of GHG emissions or the removal of GHGs from the atmosphere can be undertaken for a variety of reasons. This guidance document provides a framework for quantifying GHG emission reductions with sufficient transparency that the information can be used with reasonable confidence.
(Adapted from the author)

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