New API Reporting Guidelines Just Another Dangerous Gift to Big Oil and Gas

WASHINGTON, D.C. — The American Petroleum Institute (API) released its new proposal for oil and gas companies to report greenhouse gas emissions this week — voluntary guidelines the trade group insists will enhance “transparency” around such reporting and “accelerate climate solutions.” In reality — and to no one’s surprise — API’s new reporting measures are weak, entirely voluntary, and allow companies to cite scientifically unproven carbon capture as a climate mitigation strategy.  

In addition to its flimsy enforcement measures, API’s proposed voluntary reporting guidelines also entirely excludes scope 3 emissions — those that come from the use of oil and gas products and account for a vast majority of pollution from fossil fuel companies — allowing companies to appear more climate-friendly while continuing to pollute.   

“It should come as no surprise that the American Petroleum Institute’s new voluntary greenhouse gas reporting guidelines are nothing more than a thinly veiled attempt to let oil and gas companies avoid regulation and skirt shareholder pressure for real climate action,” said Kyle Herrig, president of Accountable.US. “Big Oil is undoubtedly thanking API for a fresh new strategy its companies can use to avoid being held responsible for their degradation of the environment. Make no mistake, this is just the latest attempt by API to pretend it supports climate action while it continues working to line the pockets of oil and gas industry executives.” 

Here are some dubious rhetorical points API is pushing to advance its guidelines — and the realities that contradict them:  

RHETORIC: API’s Greenhouse Gas Reporting Template Promotes Reporting Of Scope 1 And 2 Emissions, Only A Portion Of The Emissions That Come From Oil And Gas. 

API’s Greenhouse Gas Reporting Template Only Accounts For Scope 1 And 2 Emissions, Ignoring Scope 3 Emissions. “The template prompts for data on Scope 1 and Scope 2 GHG emissions and consists of core GHG emissions indicators that companies can voluntarily report publicly.” [API, Press Release, 06/24/21] 

Scope 1 And 2 Emissions Are Emissions That Occur In The Production And Purchase Of Oil And Gas Products. “Scope 1 emissions are direct greenhouse (GHG) emissions that occur from sources that are controlled or owned by an organization (e.g., emissions associated with fuel combustion in boilers, furnaces, vehicles). Scope 2 emissions are indirect GHG emissions associated with the purchase of electricity, steam, heat, or cooling. Although scope 2 emissions physically occur at the facility where they are generated, they are accounted for in an organization’s GHG inventory because they are a result of the organization’s energy use.” [EPA, Scope 1 And Scope 2 Inventory Guidance, accessed 06/24/21] 

REALITY: API’s Greenhouse Gas Reporting Template Ignores Scope 3 Emissions, The Source Of The Vast Majority Of Fossil Fuel Emissions. 

Scope 3 Emission Are Emissions From The Use Of A Company’s Oil And Gas Products. “Scope 3 emissions are the result of activities from assets not owned or controlled by the reporting organization, but that the organization indirectly impacts in its value chain. Scope 3 emissions include all sources not within an organization’s scope 1 and 2 boundary. The scope 3 emissions for one organization are the scope 1 and 2 emissions of another organization.” [EPA, Scope 3 Inventory Guidance, accessed 06/24/21] 

Scope 3 Emissions Are Often The Majority Of An Organization’s Total Greenhouse Gas Emissions. “Scope 3 emissions, also referred to as value chain emissions, often represent the majority of an organization’s total GHG emissions.” [EPA, Scope 3 Inventory Guidance, accessed 06/24/21] 

REALITY: Only Targeting Scope 1 And 2 Emissions Allows Oil And Gas Companies To Appear More Climate-Friendly While Continuing To Pollute 

Scope 1 And 2 Emissions Only Make Up 5-10% Of Fossil Fuel Company Emissions. 

Scope 1 And 2 Emissions Only Account For 5-10% Of The Emissions From Fossil Fuel Companies. “Several of the major fossil fuel companies have made commitments to reduce their scope 1 and 2 emissions, but that only accounts for about 5 to 10 percent of their total footprint.” [Grist, 02/12/20]  

API’s CEO Praises Successful Industry-Led Efforts To Lower Emissions By Comparing Them To Coal Emissions That Are 50% Dirtier Than Natural Gas Emissions. “Because natural gas is so much cleaner – 50% cleaner than coal – the United States today has the lowest emissions than any developed country. […] That wasn’t something that a government told the industry to do, it was really because of innovation in our industry and we’re really proud that we now today see a cleaner environment as a consequence of American innovation and American ingenuity.” [Facebook, 10/07/20]

• Moving From “Dirtier” Fuels Like Coal To Oil And Gas Do Not Help Scope 3 Emissions And Can Worsen Them If A Company Uses Their Reduced Production Emissions To Justify More Oil And Gas Extraction. “Shell, Total, and Equinor for example, include scope 3 emissions in their greenhouse gas accounting disclosures, and have also set targets for reducing the carbon intensity of their energy products. […] Carbon intensity refers to the amount of CO2 equivalent emitted per unit of energy produced. Burning coal releases a lot more CO2 than burning fracked gas, so one way to reduce carbon intensity would be to shut down all of your coal mines and invest in new fracking wells. Targeting carbon intensity gives companies the freedom to continue unbridled exploration and development of new fossil fuel reserves, as long as they continue to move from “dirtier” fuels to “cleaner” ones. It allows a company’s absolute scope 3 emissions to keep climbing.” [Grist, 02/12/20] 

RHETORIC: API’s Greenhouse Gas Reporting Template Highlights Carbon Capture As An Emissions “Mitigation” Tool For Oil And Gas Companies. 

API’s Greenhouse Gas Reporting Template Includes A Section For Companies To Report Their Carbon Capture And Storage Efforts. “The template also includes indicators on a company’s efforts to mitigate GHG emissions and a place to indicate a company’s GHG targets and other climate reporting resources, as well as a section where a company can indicate its third-party verification of GHG reporting. The GHG mitigation section contains indicators on the capture of CO2 for utilization or storage, the purchase of credits for renewable energy, and total offsets retired by the company.” [API, Press Release, 06/24/21]  

REALITY: Carbon Capture Lacks Clear Sciences On Its Efficacy And Does Not Address The Health And Environmental Risks Of Greenhouse Gas Emissions. 

Environmentalists Have Raised Concerns Over Carbon Capture Technology And Blue Hydrogen That Still Relies On Fossil Fuels And The Lack Of Clear Science Around It. “The coalition’s letter was criticized by environmentalists, who said it promoted types of hydrogen that would prove harmful to the climate and front-line communities. […] But blue hydrogen is especially fraught as a climate tool because of its reliance on fossil fuels, according to critics. A growing chorus of energy researchers and environmentalists is also warning that the emissions profiles of various types of hydrogen are highly variant and often not well-studied.” [E&E News, 03/23/21]

• Research Shows That Current Carbon Capture Technology Is Inefficient, And May Cause More Harm Than Good. “Current approaches to carbon capture can increase air pollution and are not efficient at reducing carbon in the atmosphere, according to research from Mark Z. Jacobson. One proposed method for reducing carbon dioxide (CO2) levels in the atmosphere – and reducing the risk of climate change – is to capture carbon from the air or prevent it from getting there in the first place. However, research from Mark Z. Jacobson at Stanford University, published in Energy and Environmental Science, suggests that carbon capture technologies can cause more harm than good.” [Stanford University, 10/25/19] 

RHETORIC: API’s Greenhouse Gas Reporting Template Is Designed To “Meet The Needs Of” Stakeholders.

API Called Their New Greenhouse Gas Reporting Template A Way For Oil And Gas Companies To “Meet The Needs Of Their Stakeholders.” “Companies that follow the template will likely do so in 2022 to report 2021 data, and it is expected that individual companies will continue to report additional climate-related indicators at their discretion to meet the needs of their stakeholders.” [API, Press Release, 06/24/21] 

 REALITY: Oil And Gas Companies Are Facing Pressure From Investors To Better Report Emissions And Take Action To Combat Climate Change.

BP, Shell, ExxonMobil, And Chevron Are Among The API Member Companies That Have Faced Pressure From Shareholders To Prioritize Climate Change. 

Oil And Gas Shareholders Are Increasingly Rallying Around Pro-Climate Initiatives, With Support For Multiple Emission Reduction Resolutions Skyrocketing At BP And Shell. “The Amsterdam-based Van Baal first attended Shell’s annual meeting in 2015, and introduced a first shareholder resolution calling on emissions cuts in 2016. That resolution gained only 2.8% of votes, but since then support has snowballed, and the latest resolution – which went to a vote at the Shell annual meeting on Tuesday – gained 30% of votes, a significant rebellion against the oil company by large investors. […]  Shell has now gained investor support for a plan to hit net zero by 2050 – but still wants to increase gas production in the short term. […] Last week it managed to marshal 21% of votes in favour of short-term carbon emissions targets at BP, and support for the Shell resolution at Tuesday’s annual meeting was double its 2020 result. The size of the rebellions means both companies will have to report back to investors on why they rejected the proposals.” [The Guardian, 05/20/21]

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