Image courtesy of the Image Science & Analysis Laboratory,
NASA Johnson Space Center (http://eol.jsc.nasa.gov). |
ConocoPhillips recognizes that human activity, including the
burning of fossil fuels, is contributing to increased concentrations
of greenhouse gases in the atmosphere that can lead to
adverse changes in global climate. While uncertainties remain
over the extent of human contributions and the timing and
magnitude of future impacts, we are committed to taking
action to expand our business planning processes to address
greenhouse gas (GHG) emissions and to develop greenhouse
gas targets for our operations. Our commitment to sustainable
development will provide the foundation for our actions.
Concerns continue to grow regarding the possible
environmental and financial impacts of climate change. We
recognize these concerns, and in the context of our business
we face uncertain costs and outcomes associated with:
- Developing technology, products and operating practices
which reduce or avoid GHG emissions.
- Responding to altered patterns of demand for products due
to regulations designed to combat climate change, actual
climate changes or changes in consumer attitudes toward
products based on their associated GHG emissions.
- Complying with government-mandated action.
- Adapting our facilities or operational practices due to
the physical consequences of changing climate.
No one entity can address these issues on its own, but
ConocoPhillips will show leadership in finding pragmatic
and sustainable solutions. In addition to taking actions within
our own sphere of influence, we intend to play a constructive
role in public policy dialogue to devise practical, equitable
and cost-effective approaches to stabilize the concentration
of GHG in the atmosphere. It is our view that mandatory
national regulatory frameworks which link to international
ones are most likely to achieve meaningful global GHG
reductions. We will seek to encourage policy measures
which deliver the following principles:
- Slow, stop and ultimately reverse the rate of growth in
global GHG emissions.
- Establish a value for carbon emissions, which is
transparent and relatively stable and sufficient to drive
the changed behaviors necessary to achieve targeted
emissions reductions.
- Provide long-term certainty for investment decisions.
- Encourage the development and deployment of innovative
technology to help avoid or mitigate GHG
emissions at all stages of the product life cycle.
- Realistically match the pace and stringency of policy to
the rate at which new technology or infrastructure
changes can be developed and deployed.
- Encourage energy efficiency at all stages of the product
life cycle.
- Inform and influence consumer preference toward less
GHG-intensive consumption.
- Encourage the deployment of carbon capture and storage
as a practical near-term solution.
- Avoid placing a disproportionate burden on any one
business sector or consumer segment.
- Support equitable international competition.
- Ensure that early actions are not disadvantaged.
- Avoid undue harm to the economy.
As economies around the world continue to develop, the
growing global demand for energy must be met in concert
with responsible actions on climate change. Balancing
supply and demand will require more efficient use of
energy and the full utilization of both conventional and
innovative sources of energy into the foreseeable future.
This will include renewable sources such as wind, solar,
hydro, thermal and biomass, together with nuclear power
and continued use of hydrocarbons in ways that lower the
GHG impacts of oil, gas and coal.
Meeting the twin challenges of taking action on climate change
and providing adequate and reliable supplies of energy will
require technical innovation, resource commitments and
responsible stewardship by energy producers and consumers
alike. ConocoPhillips intends to meet these challenges.
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Trainees review maps of the region. |
In Australia, we are working with the West Arnhem
Land Fire Management Project to help provide local
employment for indigenous people, while addressing a
pressing environmental issue. Savannah fires are a
significant source of greenhouse gas emissions in the
region, which the program combats with a scheduled
controlled-burn approach. This minimizes the intensity of
the fires, decreases the buildup of underbrush and creates
effective firebreaks, which substantially reduce the fires’
greenhouse gas emissions, biodiversity impacts and the
amount of actual area burned. We invest approximately
$850,000 annually in the program and can record the
emissions reductions as offsets to emissions from our
Darwin LNG operations. The approach draws upon
traditional knowledge of fire management, and indigenous
community members are employed in the program and
receive training.
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ConocoPhillips announced in April 2007 our support for a
mandatory national framework to address greenhouse gas
emissions. We joined the U.S. Climate Action Partnership
(USCAP) (
http://www.us-cap.org), a business-environmental leadership group
dedicated to the quick enactment of strong national legislation
to require significant reductions of greenhouse gas emissions.
We also have pledged $1 million to support the Climate
Change Policy Partnership (CCPP)
(
http://www.nicholas.duke.edu/institute/ccpp), a four-year
university-industry collaboration launched in 2006 by Duke
University and Duke Energy to pool the expertise of the
university’s Nicholas Institute for Environmental Policy
Solutions, Nicholas School of the Environment and Earth
Sciences, and Center on Global Change with other
concerned partners in the corporate and academic worlds.
ConocoPhillips’ gift will support research and policy analysis
on a range of issues critical to climate change and energy.
Within our operations, projects with the potential to emit
over 50,000 metric tons of carbon dioxide are subject to an
evaluation which considers the potential impact of the cost of
carbon on the project economics based on the forecast GHG
emissions over the life of the project. Typically, a range of
options to mitigate emissions will be considered before the
final project design is selected.
We also support these other organizations, universities and
research efforts:
- The Alberta Research Council’s Enhanced Coalbed
Methane Consortium.
- The U.S. Department of Energy’s Freedom Car and Fuel
partnership, providing technical expertise on funding
hydrogen economy projects.
- Sponsorship of start-up companies involved in hydrogen
production.
- Membership in California Climate Action Registry.
- Assistance with California’s Low Carbon Fuel Standard.
- Work with Detroit automakers on developing energy-saving
lubricants.
- Work with Virginia Tech on membranes to separate CO2
from methane.
- World Business Council for Sustainable Development
Energy and Climate Working Group.
- American Petroleum Institute Climate Change Steering
Committee.
- International Emissions Trading Association.
Adaptation
“Adaptation” refers to the need to respond to actual changes
in climate, which might affect landscapes, biodiversity or
physical assets, which could in turn impact agricultural and
manufacturing productivity, living or working conditions and
human behavior. The publication of the U.K. governmentsponsored
“Stern Report” in late 2006 and the International
Panel on Climate Change (IPCC) report on adaptation in
2007 has heightened awareness of this topic. The potential
future physical risks of climate change are uncertain, but
ConocoPhillips continues to study the issue both on its own
and in participation with others. For example, we co-chair the
adaptation workstream of the World Business Council for
Sustainable Development’s Energy and Climate focus area.
Greenhouse Gas (GHG) Emissions Performance*
Growth in operations has increased our total GHG emissions,
although our levels of GHG emissions per unit of production
have remained steady. The company’s total 2006 CO
2
equivalent GHG emissions
(figs. 9 -11) were approximately
62.3 million metric tons, an increase of 13 percent from 2005,
mostly due to the company’s growth through acquisitions.
Refining contributes over half of the company’s emissions. See
pages 36-37 for U.S. refining’s energy efficiency efforts, to help
address GHG emissions. The addition of the Wilhelmshaven
refinery in 2006 increased total refining and marketing
emissions, partly offset by a reduction from 2005 asset
dispositions. Emissions from exploration and production and
midstream operations increased largely due to the addition
of the former Burlington Resources assets and the start-up of
the Darwin liquefied natural gas plant in Australia.
Carbon Capture and Storage
Controlling CO
2 emissions from large-point sources like power
plants, refineries, cement plants and steel mills will require
solutions that can deal with enormous volumes of gas. CO
2
capture and storage refers to the integrated process of
separation and capture of CO
2 from industrial-scale emitters,
followed by pipeline transport to carefully selected locations
where it can be injected directly into the pores of rocks deep
underground. It can remain stored for geologic time.
CO
2 capture and storage has the potential to remove 5 percent
of current annual global CO
2 emissions or about 1 billion
metric tons per year by 2050. It could indirectly increase
energy security by enabling the continued use of coal and
heavy oils as fuel, mitigating their negative impact on the
atmosphere. It also can encourage gasification, and
ultimately enhance the diversity of energy sources available
to consumers.
ConocoPhillips is actively pursuing advances in the technology
components of CO
2 capture and storage and making detailed
studies of specific opportunities to demonstrate the process on
a large scale.
The company financially supports and intellectually engages
with many external research programs funded by industry and
government. We provide major support to:
- CO2 Capture project, which aims to lower the cost of
carbon capture and storage.
- CO2ReMoVe, a European Union project for studying
carbon dioxide storage and monitoring and verification of
the security of CO2 storage.
- Cachet, which seeks to reduce the cost of CO2 capture.
- CO2CRC, a significant Australian effort which studies
capture and storage in all aspects.
Other programs we support include:
- U.S. DOE Regional Partnerships, which seek to understand
all aspects of carbon capture and storage from public
acceptance through the technical details of carbon storage.
- CO2Net, the European network of CO2 researchers,
developers and users of CO2 mitigation technology.
- The Integrated CO2 Network (ICON), a multi-industry
coalition of 14 companies focusing on policy and infrastructure
development to encourage CO2 capture and storage in Canada.
In addition, ConocoPhillips directly supports major
university research projects in the United States, Canada,
United Kingdom and Norway.
Flaring
Flaring is a safety mechanism to burn off excess gases.
Refining units use flares to maintain safe operating pressures
during the production process. Exploration and production
flaring primarily results from burning excess field gas that
cannot be used to fuel operations. The flaring of this gas is most
common in areas of the world lacking sufficient infrastructure
to transport the excess natural gas to market.
Our flaring volume increased slightly with the growth of
our operations. In 2006, the company’s total volume flared
(figs. 12 & 13) was 44.5 billion standard cubic feet (BCF), an
increase of 7 percent from 2005. Exploration and production
and midstream operations accounted for the majority of the
company’s flaring, and for much of the increase, primarily
due to addition of the Burlington Resources assets. Although
refining reported increased flaring volumes, this was primarily
due to installation of flow meters on existing flares at a refinery,
resulting in more accurate reporting.
We are committing $150 million to reduce by one-half the
volume of gas flared from our U.S. refineries. We are
installing compressors at 13 locations to recover gas that
would otherwise have been flared and recycle it for processing
into fuels and other products. In exploration and production,
we are studying opportunities to reduce existing flaring and
have instituted a standard that new projects should be designed
to avoid continuous flaring.
In Vietnam’s Rang Dong field, a gas recovery and utilization
project will reduce CO
2 emissions by an estimated 6.77 million
metric tons over a 10-year period from 2001 to 2011. The
project captures associated gas which is produced along with
crude oil and which would previously have been flared. Now
this associated gas is being supplied as fuel for power plants,
a fertilizer plant and several nearby industrial users through a
specially built pipeline. LPGs also are being extracted from
the gas to help meet domestic demand and reduce imports.
The Rang Dong CO
2 project is the world’s first associated gas
capture project to be approved as a Clean Development
Mechanism (CDM) project under the Kyoto Protocol.
Methane
In the San Juan Basin, we have joined VISTAS, a voluntary emissions control program. |
Methane, the primary component of natural gas, is a
greenhouse gas with more than 20 times the global warming
potential of CO
2. The industry’s main sources for methane
emissions are fugitive emissions from onshore wells and the
venting of gas from offshore facilities.
In 2006, we stepped up our commitment to reduce methane
emissions through participation in the U.S. Environmental
Protection Agency’s (EPA) Natural Gas STAR program. This
voluntary program encourages natural gas companies to reduce
methane emissions by adopting cost-effective technologies and
practices that often improve operational efficiency. In North
America, our Canadian, Alaskan and Lower 48 business units
are all partners in the program.
The acquisition of Burlington Resources in 2006, which more
than doubled the size of our Lower 48 operations, presents
opportunities to reduce methane emissions still further.
Burlington already had saved more than 7.3 BCF in methane
emissions as a Natural Gas STAR partner through costeffective
technologies and practices.
In the San Juan Basin, New Mexico, where we have significant
coalbed methane production as well as conventional natural
gas production, we have joined Voluntary Innovative Strategies
for Today’s Air Standards (VISTAS), a voluntary emissions
control program administered by the New Mexico Environment
Department. The program, which is modeled on the EPA
Natural Gas STAR program, aims to identify, promote and
implement voluntary cost-effective technologies and best
practices to improve air quality in northwest New Mexico.
Roxanne Pettipas and Terence Trefiak survey pipelines in Canada with
an infrared camera. |
Companies participating in the program submit an action plan
for emissions reduction and report on progress annually. Our
actions include measures to optimize our compressor fleet to
reduce energy use, insulation of vessels such as water tanks and
separators, and measures to reduce gas venting from well-plunger
lift controllers. We also will be replacing internal combustion
engines with electric motors, using clean-burn engines to power
gas compressors and installing microturbines to generate the
electrical power needed at our salt water disposal facilities.
In ConocoPhillips Canada, new leak-detection equipment was
used to identify hydrocarbon emissions during a recent pilot
study of 22 gas processing facilities. In the pilot study, an
infrared video camera allows operators to scan large areas at
processing facilities and even miles of pipeline, delivering
real-time images of gas leaks more quickly and accurately than
conventional leak-discovery methods.
After detection of the leak, another device called the “Hi-Flow
Sampler” is used to measure the rate of the leak and determine
a cost/benefit analysis of proposed repairs. Some repairs are as
simple as tightening a bolt; others require capital projects.
Often, since these projects recover methane that would
otherwise be lost, they quickly pay for themselves. In some
instances, operations crews following the detection team can
make immediate repairs. During a recent trial, 144 fugitive
sources were found and 92 percent proved economical to fix,
recovering gas valued at an estimated $2 million per year. In
2007, ConocoPhillips Canada plans to expand this program
from the pilot stage to the full business unit.
Carbon Trading
Since 2005, ConocoPhillips facilities across Europe have been
subject to the European Union’s emissions-trading program.
We also have been active in emissions trading in Canada. The
company’s commercial organization trades CO
2 allowances in
order to optimize ConocoPhillips’ net emissions position for
businesses in Europe and Canada.
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