Oil climate disclosures riddled with ‘questionable claims’

EEnvironmental disclosures from some of America’s biggest oil and gas companies contain ‘questionable claims’ about climate risks and greenhouse gas emissions, frustrating investors under pressure to divest from fossil fuels, researchers have found from Columbia University.

Emissions data reported by oil companies are ‘awash with unsubstantiated claims’, according to an analysis of 15 publicly traded oil companies and a dozen major oil investors in the United States by the Center on Global Energy University policies.

With growing pressure to divest from oil and gas, investors are increasingly demanding more standardized and robust climate and emissions information from the industry. Some of the biggest companies already voluntarily disclose their greenhouse gas emissions, but the lack of government regulation and unified reporting underscores the challenges investors face when comparing inconsistent data across companies.

For example, Columbia researchers found that shale gas producer EQT Corp. had not disclosed any emissions from flaring, but defined flaring based on the American Exploration Petroleum Council’s definition, which only includes flaring of wellhead gas on company-operated assets. EQT’s report omits flared gas from other sources downstream of the well and flaring from emergency incidents, the report released on Tuesday said.

“The definition used is neither debatable, as it is an industry standard as stated, nor does it alter or affect the data included in our ESG report, which shows that EQT has the one of the lowest methane intensities in the oil and gas space,” an EQT spokesperson said in response to the study.

Oil investors “noted with frustration the difficulty of trusting numbers self-reported by companies and rarely verified by independent third parties, even though the way U.S. oil and gas companies report their emissions complies with existing Agency regulations. environmental protection,” according to Columbia researchers. who interviewed investors representing major banks, insurers, asset managers and private equity funds.

The Securities and Exchange Commission introduced new guidelines last month that would require publicly traded U.S. companies to report climate risks and greenhouse gas emissions from their operations. If adopted, the proposed rules are expected to come into force in the coming years.

“Clearly, a regulatory push is also needed to incentivize all operators in the U.S. oil and gas sector to apply these innovations and better measure and reduce GHG emissions,” the researchers said. “Most operators are reluctant to undertake emissions reduction efforts if they are increasing operating costs, costs that are not always recoverable.”

Although they expressed differing opinions on the future of fossil fuels, investors interviewed by the researchers agreed that oil companies should reduce emissions from their operations by eliminating routine flaring. The oil and gas sector accounts for 9% of global greenhouse gas emissions, and indirectly an additional 33% when its products are consumed.

Some investors have gone even further, saying that oil companies should report so-called scope 3 emissions, or greenhouse gases emitted by customers of petroleum products. However, other investors have said that companies should not take responsibility for these emissions, instead believing that it is the role of end users. Only five companies – Chevron Corp., Hess Corp., ConocoPhillips, EQT and Occidental Petroleum Corp. – declared scope 3 broadcasts.

“Given the strong demand for oil and gas, it is safe to say that engagement with the sector can achieve more to improve practices and have a significant impact on GHG emissions” – instead of divestment of fossil fuels , the researchers said.

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