WESTAR Oil & Gas Workshop Oil & Gas Exploration & Production and Natural Gas Gathering & Processing Greenhouse Gas Accounting Protocol Development WESTAR Oil & Gas Workshop October 22, 2008

What is a Protocol? Framework document that informs consistent, comparable, transparent, accurate GHG inventory methodology – Describes how to do voluntary reporting with verification method Definitions Scope & boundary requirements Calculations (emission factors, methodologies) Adoption by TCR provides consistent and transparent accounting method for all users – industry, governments, non-governmental organizations

Regulatory Reporting Support Products Technical background and scoping paper Overview of GHG sources and available estimation methods for O&G field operations Include E&P activities, gas processing plants, and the operation of collection systems delivering oil and gas products to processing and refining facilities. Proposed outlines for the products that follow (regulatory & protocol) Prioritize sources in terms of their known or projected contributions to GHG emissions, both: Within the partner jurisdictions of the Western Climate Initiative Within North America Address emissions sources from all six Kyoto gases within this sector.

Regulatory Reporting Support Products, continued Technical review document of emissions quantification methods for high-priority sources identified in the background and scoping paper, designed to inform and guide development of mandatory reporting requirements by partner jurisdictions in the Western Climate Initiative

All O&G source activities upstream of: Scope of the Technical Review of emissions quantification methods for high-priority sources & the Protocol North America All O&G source activities upstream of: Oil refineries (covered by CCAR protocol) Gas sale pipeline transfer points (also CCAR protocol) Minimum effort: Conventional O&G E&P “Old” oil fields – including methods to increase & sustain O&G production, also old & new gas production Coalbed Methane fields Offshore Expanded effort: “Unconventional” O&G E&P Oil sands Oil shale

Why Oil and Gas? Source: American Petroleum Institute: Toward a Consistent Methodology for Estimating Greenhouse Gas Emissions from Oil and Natural Gas Industry Operations. Page 4.

Deliverables for this project Background & scoping paper Technical paper defining high-priority, high-accuracy source activities: Supports mandatory Greenhouse Gas Reporting rulemakings for NM & CA – for Western Climate Initiative Underpins preparation of voluntary GHG protocol Reporting & verification protocol, to align with TCR’s existing General Reporting Protocol & General Verification Protocol Protocol drafts and final approval by The Climate Registry

Technical Review Paper & Protocol Development Process Conduct literature review Scoping paper, followed by technical review paper Multi-stakeholder workgroup reviews scoping and technical review paper, then reviews protocol drafts Broad expert review of protocol drafts, with off-ramp at this point for regulatory process Protocol public review & comment Adoption/implementation of protocol

What Resources are available for Protocol Development? GHG Protocol CA Registry and TCR Registry GRP API Compendium IEPCA Guidelines CEC Evaluation GHG Protocol Framework: Direct emissions (Scope 1) Indirect emissions (Scope 2,3) Organizational boundaries Operational boundaries GRPs: Geographic boundaries Materiality threshold Calculations/emission factors: Stationary combustion Mobile combustion Indirect emissions API Compendium Identify sources Identify emission factors Sample calculation methodologies IPIECA Guidelines Builds on GHG Protocol guidance specific to petroleum industry Inform boundaries Examples of equity share/operational control Identify & classify sources Table 6.1 – Upstream Petroleum Operations Emissions Calcs Outlines tiered approach CEC Evaluation Gap analysis of API Compendium & IPIECA Compares w/CCAR GRP IDs potential users Some outdated emission factors IPIECA provides framework, but not program-specific applicability Conclusion: most work needed for CH4 emissions

Technical Paper & Protocol Development Schedule September 08 - Finalize project plan, Issue Technical Support Contractor RFP October - Review bids, Interviews, Issue contract November - Begin regular Technical Workgroup calls & meetings, Draft technical paper Dec.– Feb. 09 - TWG meetings, additional work products March - Begin protocol drafting with TWG and Protocol Advisory Group May - Review of draft final protocol June - Public comment period for TCR July - Protocol action & approval by TCR!

Budget ~$300K to complete – funding primarily from NMED and CARB $100K project management & facilitation up to $200K Technical support contract Donations greatly appreciated! BP & Chevron have seeded with $10k

Questions? For More Information: Project webpage: http://www.wrapair.org/ClimateChange/GHGProtocol/index.html Tom Moore: mooret@cira.colostate.edu Lee Gribovicz: lg@westgov.org