The Right Measure is a landmark, industry participant informed study that establishes more consistent, reliable and transparent insight of GHG emissions estimates over the lifecycle of crude oil.
The energy transition is accelerating, and investors are eager to incorporate GHG metrics into their decision-making process. Companies are responding by increasing the breadth and depth of their disclosure.
Yet differences between estimation methods continue to frustrate investor and stakeholder efforts to meaningfully compare and incorporate GHG emissions. With so many estimates being made, particularly from third parties, questions about estimation quality are being raised—recognizing some assumptions are still needed (including current known-unknowns such as fugitive methane emissions).
The Right Measure tackles these challenges head on, and provides critical context to assist in greater crude oil life-cycle estimation alignment, estimate quality and critical context in interpreting life-cycle GHG emissions of crude oil.
The Right Measure builds upon existing IHS Markit research, established industry practices and academic studies to create the IHS Markit Crude Oil Life-cycle Emissions Guidebook.
- The Guidebook provides additional guidance to put life-cycle GHG estimates of crude oil on a comparable basis with IHS Markit life-cycle benchmarks, and other companies and practioners using the Guidebook.
- The study announces a Data Quality Metric or DQM developed jointly with the National Energy Technology Labs (NETL) that communicates the reliability and representativeness of an estimate. Understanding estimate quality is critical for users to understand the limitations of the data they are using, and provides a method to identify areas of data quality and estimate improvement.
- Finally, the study establishes the US Average Crude Oil Emissions Benchmark or ‘the US Average’ as an industry indicator for the average GHG intensity of crude oils being processed in the world’s largest refining market. The US Average provides critical context to help companies and stakeholders evaluate the GHG intensity of crude oil.
These set the foundation for greater consistency, comparability and transparency of crude oil life-cycle GHG emissions with implications for other hydrocarbon commodities too.
This groundbreaking IHS Markit GHG emissions study provides a new benchmark and essential insight to understand the carbon competitiveness of crude oil today and for energy transition.