ConocoPhillips
2006 Sustainable Growth Report2006 Sustainable Growth Report
Minimize Environmental Impact

Operating in Sensitive Environments

Arctic Circle
Many of our global oil reserves are located north of the Arctic Circle.
Our Approach to Biodiversity Conservation

We recognize the importance of protecting and promoting biodiversity, particularly in sensitive areas. During 2007, we are developing a corporate biodiversity conservation position.

We follow widely accepted guidelines from the International Petroleum Industry Environmental Conservation Association (IPIECA) and the International Association of Oil and Gas Producers (OGP) in our approach to biodiversity conservation. We also have been working with IPIECA’s biodiversity working group to develop tools and materials to help companies across our industry enhance their biodiversity conservation activities.

We are a founding member of the OGP’s Sound and Marine Life program, which is investigating the possible impact of sound produced by offshore exploration and production on marine mammals, fish, turtles, seabirds, invertebrates and other marine life. The joint industry program is researching a range of sound sources, including seismic air guns, drilling, dredging, pile-driving, construction and decommissioning.

We are chairing a workgroup of the Environmental Studies Research Fund, which is conducting laboratory tests of the potential impact of seismic surveys on monkfish eggs. Monkfish are of great commercial importance in the Newfoundland area, but little is known of their biology. This study will not only help industry learn how to avoid impacting the monkfish population, but also advance knowledge of monkfish biology. We have developed the SPIRIT of Conservation program, which builds on our long-term partnership with the National Fish and Wildlife Foundation and aims to preserve and protect the habitats of birds all over the world. (See Community Investment section.)

Environmental Conservation in the Arctic

Many of our global oil reserves are located north of the Arctic Circle. We believe it is important to balance our presence in Arctic ecosystems with responsible conservation measures to protect them. This requires open dialogue between environmentalists, industry, governments and other interested parties.

We are participating in the International Polar Year, a 24-month scientific research program focused on the Arctic and the Antarctic. Organized by the International Council for Science and the World Meteorological Organization, the program involves over 200 projects from March 2007 to March 2009, with thousands of scientists from over 60 nations examining a wide range of physical, biological and social research topics. In January 2007, we sponsored the first annual Arctic Frontiers conference in Tromsø, Norway, which provided a forum for communication and collaboration among Arctic stakeholders to promote sustainable development in Arctic regions based on scientific knowledge and cultural sensitivity.

In 2006, we participated in an IPIECA/OGP biodiversity workshop in Tromsø, Norway, which brought together environmental experts from the oil industry, government and nongovernment organizations, as well as representatives from indigenous communities, to share information and improve understanding of biodiversity conservation issues in the Arctic.

Within ConocoPhillips, we formed an Arctic Technology Council in 2005 to exchange best practices among our businesses in Russia, Norway, Canada and Alaska. One of the council’s key tasks is to compile a computer-based geographic information system of environmental data to serve as a management planning tool for the Arctic region.

Nenets tribeswoman
A tribeswoman of the Nenets, an indigenous group located in the Arctic regions of Russia. We are investing in the creation of an environmental database for the Nenets region for use in impact assessment and oil pollution prevention planning in the region.
Barents Sea – In Norway and Russia, we are investing $2 million a year on Arctic environmental research projects in the Barents Sea region. Among them is a study to monitor the effect of oil and gas activities on polar cod in the Barents Sea. Polar cod is a key species for environmental risk assessment because it is the only fish whose life cycle is closely associated with the ice-edge ecosystem.

Another project is exploring the feasibility of transferring environmental information to a central laboratory from remote biological sensors on marine life. One idea is to monitor the heart rate of crabs using noninvasive infrared light to detect signs of stress caused by oil pollution and to transmit this information in real time back to the laboratory. The experiment is being conducted at the Ny-Ålesund marine research laboratoryon the west coast of Spitzbergen in Norway. We donated $1 million to build the laboratory, which opened in 2005 to provide Arctic marine research facilities to the international research community.

We are creating an environmental database for the Nenets region on the east coast of Russia. The database will be used for impact assessment and oil pollution prevention planning in the region, which has significant hydrocarbon reserves and exceptional wildlife habitat, including walrus rookeries and coastal marsh areas.

Another project will assess the long-term impact of pollution on the Pechora River, a unique Arctic fresh-water ecosystem, which was affected by an industry pipeline oil spill in the 1990s. The information will be used to develop contingency plans in the event of a future incident.

Spectacled EidersIn Alaska, we conduct aerial surveys of various bird species, such as spectacled eiders (an endangered species of sea duck, pictured here), tundra swans and yellow-billed loons.
Alaska – We conduct multidisciplinary environmental studies to support exploration, development and operations activities on the North Slope. The most extensive program is the documentation of baseline conditions prior to new developments in environmentally sensitive areas. An archaeological survey is always conducted to ensure that we avoid culturally important sites or artifacts.

Key wildlife species are studied and their habitats mapped to help project engineers plan the routing and placement of gravel roads and drilling pads to minimize environmental impact. For example, to comply with federal regulations that require us to avoid polar bear dens during winter activities, we provide support to the U.S. Geological Survey’s polar bear team to place satellite or GPS transmitters on the animals. These biologists then conduct aerial surveys to locate polar bear dens in the early winter. In addition to data from monitoring the tagged bears, we use infrared equipment mounted on our fixed wing aircraft to detect a heat signature from the bears in the den. With all these data in hand, we can direct our ground crews to stay at least a mile away from a polar bear den.

Several fish species found in the streams, rivers and lakes, and along the Arctic coastline, support subsistence, commercial, and recreational fisheries. We have conducted and supported numerous fisheries studies since 1985. We work closely with the Alaska Department of Natural Resources’ Habitat Division and other interested agencies, such as the National Marine Fisheries Service, during development or exploration in new areas to avoid impacting any of these important fisheries.

One of the ways we mitigate our impact on the delicate tundra is by reducing our “footprint” – the amount of land needed for operations. Today our sites are significantly smaller than those of early North Slope developments. On the western North Slope, for example, the Nanuq drill site in our Alpine oil field was constructed with rounded contours, which the local community felt would make it less of an obstacle to migrating caribou than the traditional square configuration. To minimize its footprint, the Alpine field has been constructed without a permanent access road to the rest of the state and other North Slope infrastructure. Instead, equipment and supplies are brought in by aircraft for most of the year. At Fiord, a roadless drill pad located in the Colville Delta, flights are restricted during key nesting periods to minimize disturbance to the area’s spectacled eider population.

Since heavy or bulky loads can only be transported over land, during the winter we build ice roads, ice bridges and ice pads to protect the tundra. Drilling rigs are modified for disassembly into many loads for transport using low-ground-pressure vehicles and are then reassembled at the drill site. We open our temporary roads for use by indigenous North Slope residents each winter to bring in essential supplies.

We operate air-monitoring stations on the North Slope to measure pollutants, and their results show that air quality is consistently better than national standards. In 2005, we signed an agreement with the state of Alaska to reduce sulfur dioxide emissions on the North Slope. Under the agreement, we will use ultra-low-sulfur diesel fuel in virtually all combustion sources beginning in June 2010 or before. The agreement is expected to reduce sulfur dioxide emissions on the North Slope by 363 metric tons per year.

Our Alpine development will also supply natural gas to the indigenous Inupiat community of Nuiqsut through a utility system built and operated by the North Slope Borough. The gas will replace expensive heating oil, reducing the annual utilities expense for the borough and providing clean, convenient and economic fuel to village residents.

Canada – In 2006, we contributed $45,000 to a regional caribou collaring program as part of our predevelopment monitoring activities for the proposed Parsons Lake gas field in the Northwest Territories. GPS collars were placed on caribou so that the herd’s movements and numbers could be monitored. The information will be used to help plan the proposed gas field development, which overlaps with the over-wintering area of the Cape Bathurst and Blue-nose West caribou herds.

Environmental Conservation Across the Globe

Venezuela – We have left a legacy of biodiversity conservation through our contributions to research, knowledge dissemination and management of aquatic biodiversity, birdlife and threatened species in the Gulf of Paria and the Orinoco Delta.

As part of this effort, we partnered with Conservation International to promote biodiversity conservation and sustainable development in the Gulf of Paria, one of the Caribbean’s richest areas of aquatic life. This included a study which showed that the Gulf of Paria and adjacent Orinoco Delta sustain a unique variety and abundance of aquatic species, including some new to science and many of which were previously not known to exist in the region. This resulted in the launch of a biodiversity action plan in 2004 to promote environmental protection and regional economic development. We continued to work in consultation with key stakeholders to generate interest and support for the plan and to implement its recommendations, including the establishment in 2005 of an ongoing pilot biodiversity community participatory monitoring program.

Sakernan pipeline
The Sakernan pipeline route in Indonesia before and after revegetation.
Indonesia – We are working closely with local stakeholders on a revegetation project in Sumatra, Indonesia, designed to reduce land erosion, improve soil stability and decrease illegal land use. During a 16-month program, 450 acres of land along the route of the Sakernan pipeline were replanted with quick-growing native evergreen plants suited to the acidic soil and sloping terrain.

We also are collaborating with the Indonesian government and the Zoological Society of London to survey the Bentayan and Dangku forests of South Sumatra, which adjoin our onshore operating areas, for signs of the endangered Sumatran tiger, whose numbers are threatened by deforestation and poaching. Early results show that the Dangku forest supports at least five adult tigers. Other forest conservation projects include mapping disturbed areas and revegetating old roads to restore habitat for tigers, birds and other wildlife. Support has been financial, as well as in-kind. These efforts will help us plan future operations in this area of rich biodiversity and focus our revegetation programs where they will do the most good.

Coral in Qatar
Scientists number and tag relocated coral off the coastline of Qatar for future monitoring.
Qatar – In 2006 and 2007, ConocoPhillips, along with Qatargas and Shell, took part in a major environmental initiative to relocate more than 4,500 coral colonies off the coast of Qatar. The corals were discovered as plans were being developed for the future pipeline corridors of the Qatargas 3 and Qatargas 4 projects. Coral preservation is of great importance because natural “hot water” events in 1998 and 2002 had decimated the coral population in these shallow waters.

Removal and relocation operations began in October 2006 and continued for five months. First, the coral colonies were carefully detached by scientists from the seafloor and placed in basket-shaped storage containers that remained at the bottom until ready for transport. The baskets were then lifted aboard a ship and placed in large, circulating seawater pools. The corals then were transported to the new location and reattached to the seafloor, where scientists numbered and tagged the sites for future monitoring.

At six and 12 months after the relocation, an environmental survey will be conducted to determine the project’s success. The corals’ color and health, as well as any major changes to the surrounding habitat, will be monitored. Qatargas has recommended that the new area be designated as a natural marine reserve.

Environmental Responsibility in Oil Sands

Anticipating future growth in production from oil sands, in 2006, we conducted analysis of potential environmental impacts that could arise both from our development and from that of industry as a whole. From this, we identified a number of environmental issues that need management, including carbon dioxide emissions, water quality and impact on caribou. We also identified mitigation measures for these issues that we believe will enable us to produce oil sands in a responsible manner.

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Woodland Caribou in Canada’s Boreal Forests

Woodland Caribou
Seismic lines are now laid in a narrower zigzag pattern and felled trees left in the cutline to protect the caribou (inset) from line-ofsight attacks by wolves and to discourage the lines’ adoption as pathways and trails.
ConocoPhillips recognizes that the Woodland Caribou are a threatened species in Canada. Contributing factors to the decline of the caribou in Canada’s boreal forests include predation by wolves, coyotes and bears; habitat disturbance caused by human development; hunting; and disease. Stakeholders have expressed concerns to ConocoPhillips about our presence in areas of caribou habitat and our efforts to protect caribou near our operations, particularly the Little Smoky Caribou herd, whose numbers have been declining.

We have been working collaboratively with a broad group of stakeholders, including government, research organizations, aboriginal communities, environmental organizations and our industry peers, for over 15 years to address the issue of caribou protection. We began our formal caribou protection program in 2004, which continues today.

Our commitments include restoration of habitat in already disturbed areas, minimizing our footprint for new projects and research into helping the herd expand its numbers. For example, we recently needed to lay a 60-mile pipeline through caribou habitat. We defined a route that followed existing rights-of-way for more than 90 percent of its length and had the fewest critical water crossings. With project partner Suncor Energy, we also committed $1.5 million to assess, and where needed, restore and replant some 250 miles of former oil industry “cutlines” – long, straight clearings through the trees to facilitate seismic surveys.

The restoration, which received a Steward of Excellence Award from the Canadian Association of Petroleum Producers in 2005, was conducted in consultation with other land users such as forestry industry representatives, recreational users and importantly, wildlife scientists from the Biological Sciences and Renewable Resources Departments of the University of Alberta.

In early 2007, we met with a panel of experts to seek their input, specifically on the Little Smoky Caribou herd. We are a founding member of the Caribou Landscape Management Association, in which we collaborated with other oil and natural gas companies, forestry companies and regulators to develop a cooperative access-andrestoration plan for caribou habitat in Alberta and fund the first captive caribou calf birthing program in the province of Alberta, aiming to reverse the decline of the Little Smoky caribou herd.

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