BP America, Inc

Ralph J. Moran

DRAFT 1201 K Street, Suite 1990

Sacramento, CA 95814

(916) 554-4504

Via EmailDATE: August 13, 2008

To: Steve OwensJanice AdairCo-Chairs, Western Climate Initiative

Subject: BP America, Inc. (BP) Comments on the “Draft Essential Requirements of Mandatory Reporting for the Western Climate Initiative”

Dear Janice and Steve:

BP is appreciative of the opportunity to respond to the Western Climate Initiative’s (WCI) request for public input on the “Draft Essential Requirements of Mandatory Reporting for the Western Climate Initiative, dated July 23, 2008 and prepared by the WCI Reporting Subcommittee.

BP submitted comments to the April Draft Reporting Recommendations. We are now taking the opportunity to emphasize and expand on some of the points raised on reporting in our previous submittal and reply to your specific request for key component decisions and needs as development of the reporting program moves forward.

DefinitionsIt is appropriate for WCI to draw on the work of others to create a list of definitions, but the ultimate source of definitions should be driven by the specific intent of the WCI cap & trade program. CARB definitions are generated from the detail specifics and intent of the CARB program. Much of the language and definitions are crafted specifically for that program. The WCI reporting program should be designed to support the WCI cap & trade program, just as the CARB program is designed to support the many direct regulatory components of the CARB Scoping Plan.

BP America, IncComments to WCI

Many of the definitions of the CARB program are overly CARB-specific to be used as a WCI starting point. WCI should start with the higher level definitions of the TCR General Reporting Protocol and use a variety of source material (e.g. CARB, EPA, other agencies, etc.) to develop additional and refined definitions as the WCI C&T program develops. This will allow consistency with other similar programs while tailoring definitions to the intent of the WCI program. An additional advantage of starting with the TCR product is that because all WCI partners are members of TCR, all would be presumably starting from a point of agreement.

WCI should also give special attention to specific terms of importance to cap & trade application. The definition of “facility” for oil and gas E&P operations is a good example. CARB definitions are adopted from the perspective of a reporting program and do not consider what the implications or use within a trading program might be. WCI should develop a unique definition that will allow E&P operations to participate in a cap & trade in a manageable way (i.e. facilities defined by production field, not as thousands of individual wells).

ApplicabilityWCI should consider the fact that a reporting threshold should be made consistent with terms and definitions – for example the definition of “facility”. Thresholds (as well as point of regulation) are used to keep the number of reporters/participants in the cap & trade program to a manageable number.

TimingIt is critical that all jurisdictions have similar timelines for data reporting. This will allow for stable market performance and a level playing field for all participants. Effective date, reporting period, and submission dates should be harmonized across all jurisdictions.

The reporting period should begin January 1st for simplicity, alignment with other management practices, and alignment with other trading market operations that may be linked to WCI (i.e. EU ETS, RGGI, etc.).

Submission date should be determined with consideration for how data will be used in a market. Submission dates should be annual and also allow sufficient time (~4 months) for 3rd party verification.

ConfidentialityIn general, GHG emission data reported for use in a cap & trade program should not be confidential. However, certain supporting information submitted through the reporting system should be offered confidentiality protection in accordance with applicable federal, state, provincial and territorial legislation governing access to information. Confidential information should not be disclosed to the public or to other jurisdictions.

Reporting Content and SubmittalWCI should strive to harmonize the elements of required reporting across all jurisdictions. This will allow companies with operations in multiple jurisdictions to optimize their

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BP America, IncComments to WCI

reporting activities and not differentially burden one jurisdiction over another. It should not matter who (jurisdiction or TCR) receives the data first (although data transfer should be minimized), as long as the data is centrally stored and content is similar.

Emission Quantification and MonitoringWCI should rely on existing sector-specific, internationally accepted, emission quantification methods (i.e. API Compendium of GHG Emissions Methodologies for the Oil and Gas Industry). WCI should allow for the flexibility found in these generally accepted quantification methods and should avoid dictating specific methods for source types.

Static quantification guidance will be difficult to modify and adjust as new or improved methodologies become available, and leave no room to address the balance of accuracy and materiality. These issues must be weighed and addressed in the verification process.

Verification and Quality AssuranceAs stated in our initial comments, the key to a functional market is the principle that a ton is a ton, no matter of jurisdiction. This can only happen if all companies participating in the cap & trade program are subject to identical and thorough monitoring, reporting, and verification requirements.

If the data for WCI will be used to support a cap & trade system, it is important that the data have some type of 3rd party verification. The best way to ensure a stable, efficient market is to be sure that it is using accurate, transparent, and complete data.

Conference Calls and Written Comments vs. Stakeholder MeetingsThere is a role for calls and written comments, as well as for stakeholder meetings. Calls and written comments are good for quick feedback and communication. However, face-to-face meetings allow for a fuller and more robust discussion, and an open and interactive exchange of ideas. There are still many significant WCI reporting requirements that need to be addressed and determined that would benefit from greatly increased stakeholder outreach that goes beyond the process of written comments. We urge the WCI Reporting Subcommittee to engage stakeholders in face-to-face meetings to work out the critical details of these reporting requirements.

Thank you for this opportunity to offer comment. Please feel free to contact me if you have any additional questions.

Sincerely,

Ralph J. MoranDirector, West Coast Climate Change IssuesBP America, Inc.

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