OGCI Sets Carbon Intensity Target

20 July 2020

The Oil and Gas Climate Initiative (OGCI) announced a target to reduce the collective average carbon intensity of member companies’ aggregated upstream oil and gas operations to between 20 kg and 21 kg CO2e/boe by 2025, from a collective baseline of 23 kg CO2e/boe in 2017.

The range is consistent with the reduction needed across the oil and gas industry by 2025 to support the Paris Agreement goals[1]. The target represents a reduction of between 36 and 52 million tonnes of CO2e per year by 2025 (assuming constant levels of marketed oil and gas production), equivalent to the CO2 emissions from energy use in between 4 and 6 million homes.[2]

OGCI wants to play an active role in accelerating and shaping the global pathway to net zero emissions through collective and practical actions. This carbon intensity target is a near-term and practical step for member companies to continue to expand their contribution to the transition to a low carbon economy.

The target covers both carbon dioxide and methane emissions from OGCI member companies’ operated upstream oil and gas exploration and production activities, as well as emissions from associated imports of electricity and steam. OGCI will be working on specific actions on emissions from liquefied natural gas (LNG) and gas-to-liquids (GTL), to take their collective ambitions further[3]. Carbon intensity is calculated as a share of marketed oil and gas production.

To contribute to the reduction of their collective average carbon intensity, OGCI member companies are implementing a range of measures in their own operations, including improving energy efficiency, reducing methane emissions, minimizing flaring, electrifying operations using renewable electricity where possible, co-generating electricity and useful heat and deploying carbon capture, utilization and storage.

OGCI’s collective carbon intensity will be reported on an annual basis consistent with the OGCI public reporting methodology and assumptions[4], with data reviewed by EY, as an independent third party. While methane emissions will be included in the carbon intensity target, representing up to a quarter of the improvement, OGCI will also continue to separately report progress on reducing methane intensity.

References:

[1] Extrapolated on the same perimeter from IPCC AR4 data and International Energy Agency data (World Economic Outlook 2018 and 2019 editions and the IEA special report The Oil and Gas Industry in Energy Transitions, 2020).
[2] Data based on US energy usage.
[3] Note that the collective 2017 baseline of 23 kg CO2e/boe referenced above is a reduction from the 2017 baseline reported in the Annual Report 2019. This reduction is a result of excluding emissions from LNG and GTL.
[4] See the OGCI Reporting Framework

Press Release Courtesy of OGCI.