OILPATCH REPORT POINTS TO NEED FOR IMPROVEMENT

Transparency seen as a key sticking point

Criticism of the environmental performance of the oil and gas industry comes from all over these days, but one unexpected place is page eight of the latest progress report for CAPP’s Responsible Canadian Energy program.

Even before it gets to the performance review for 2011, the lobby group turns over prime real estate in its report to a statement from the 10-member advisory group for the program. And it promptly tells the Canadian Association of Petroleum Producers and its member companies where they could, and should, do better. The statement pulled few punches.

“The industry should more openly explain what is being done to address areas where performance has not improved (e.g. land reclamation) or has plateaued (e.g., safety performance and GHG emissions),” the advisory group stated, for example.

The progress report measures the performance in four key metrics — people, air, water and land — from the more than 100 CAPP companies that produce about 90 per cent of the crude oil and natural gas in Canada.

The independent advisory group — with representatives from the safety, environment, Aboriginal, labour, academic, corporate governance and investment communities — acknowledged the scope of the report could be more ambitious. Commendations and censure are fair game, said CAPP spokesman Travis Davies.

“If you’re going to have a third-party advisory board you have to let them have a voice,” he said. Over its 19 pages, the report provides numerous statistics on how water usage or nitric oxide and sulphur dioxide emissions were lower in 2011 and greenhouse gases were flat despite increased oil and gas production.

Nonetheless, I found the 500-plus words from the Advisory Committee a far more compelling read.

It points out, for example, “that the primary focus on reporting progress against prior years does not, on its own, adequately demonstrate how the CAPP membership is conducting its businesses in an environmentally responsible manner.”

Even year-over-year comparisons can be deceiving.

The report released Wednesday noted direct greenhouse gas emissions from CAPP’s members declined by 0.5 per cent in 2011 from the previous year to 87.6 million tonnes. Left unsaid was the fact that GHG emissions had climbed from 76.8 million tonnes in 2009.

There was progress, but it needs to be kept in perspective. All told, CAPP’s members contributed 15 per cent of Canada’s GHG emissions in 2011.

The advisory group — which is chaired by environmental policy consultant Ken Ogilvie and includes former federal Justice Minister Anne McLellan and John Lounds of the Nature Conservancy of Canada — is charged with the task of challenging CAPP and its members to continuously improve their performance.

In fact, they urged CAPP to include “more robust metrics that help provide this added context, which would aid in understanding and assessing upstream oil and gas industry impacts and benefits and in demonstrating industry performance in the context of broader societal goals.”

This shouldn’t be construed as a criticism of CAPP.

In fact, CAPP deserves credit for cutting down on “messaging” in the report, focusing on statistics and acknowledging areas where the industry needs to improve prominence. Hopefully, senior executives with its member companies will read the criticism as much as they read the details of reductions in water use and emissions.

Of course, advice only helps if the industry takes it to heart.

In CAPP’s 2010 report, the advisory group pointed out “current gaps that should be addressed in future reports include: water quality, ecosystem biodiversity, better land disturbance metrics, and carbon emission offsets.”

In the latest report, the group said, “We are disappointed that progress has not been made on developing water quality and better land disturbance metrics and we recommend active work by CAPP in these areas for the 2013 report.”

For those paying close attention, yes, CAPP’s 2010 report was followed by its 2012 report. It’s not that CAPP forgot 2011. The 2012 report actually covers 2011. Don’t worry. It doesn’t make much sense, but it relates to CAPP’s goal is to have the report out much earlier in the year to keep it more relevant.

The advisory group is by no means entirely negative.

It notes CAPP members should be applauded for their “efforts to accelerate technology development and deployment.” Left unsaid in that case is the fact those efforts can contribute directly to a company’s bottom line.

Nor does CAPP’s report contain all of the interesting numbers for the industry’s performance in 2011. While CAPP notes its members paid $20 billion in taxes and royalties to governments in 2011, it was the left-leaning Polaris Institute which reported Wednesday CAPP had 190 contacts with federal government officials in 2011, up from 86 in 2010 and far more than other industries.

The point is CAPP is a lobby group first and foremost and not a regulator for the industry

However, producing reports that tell the public and, perhaps especially, its members where there are areas that need improvement it helps to improve performance and trustworthiness.

“The road to credibility is a long one and you’ve got to earn it,” said Davies, “so these are the types of reports you have to put out.”