Overview
Water issues are often local, but may be influenced by large-scale trends.  In the future, increased competition for fresh water will strengthen the need for optimal management of this resource. Projected population growth will increase demand for water – for personal use, sanitation, manufacturing, energy production and food production.  In addition, a physically changing climate, and possible impacts including rising sea levels, declining water storage in the form of snow, glaciers and ice caps, and increasing droughts and floods – are likely to impact water supplies. Finally, many of the proposed methods for producing low carbon and renewable energies are water intensive and their increased use will further increase competition for fresh water.

When evaluating water risks, ConocoPhillips starts at a high level with an enterprise-wide search for issues around the world.  After completing this global portfolio screening, we then take a deeper look at potential water risks or opportunities.  Using the results of these assessments, combined with operational knowledge of our sites, we can then develop action plans at a local or asset level as illustrated in the following diagram.  

In addition to action plan development for key assets, progressing the strategy benefits other aspects of the company’s activities.  The recent work on assessments identified common issues and business needs that affect advocacy and corporate policy.  The strategy development also eliminated duplication in water data collection requirements, so that water data is now collected within the existing Corporate HSE data collection process and assets may collect additional data as part of the Long Range Planning process.  Data tracking is done using internal systems and the individual results are not publically available.  ConocoPhillips is working to understand the impacts, risks and opportunities from water associated with our activities, and work is done in keeping with our public positions on water.   

Impact Assessment
ConocoPhillips utilized the World Business Council for Sustainable Development (WBCSD) Global Water Tool, and our operational experience, to identify priority assets.  ConocoPhillips then adapted the Global Environmental Management Initiative (GEMI) Local Water Tool to develop a Water Risk Assessment questionnaire for these priority assets. Pilot testing validated that the process would identify issues, gaps or practices, which could then be addressed at the asset level or at an integrated corporate level. Both tools were used to look at risk factors and to facilitate discussions between the experts at each location. Between 2009 and 2011 ConocoPhillips assessed more than 30 upstream assets. 

Strategic Planning
It is important that we integrate water management into strategy and action planning for our activities. Access to freshwater resources for some new developments is becoming more difficult and expensive, some assets are challenged to meet increasingly stringent effluent standards, and there are public concerns about groundwater protection in some areas. We believe early identification of water risks positions us to plan and manage impacts or risks appropriately. 

Results of the assessments are integrated into asset specific action plans designed to fit the specific needs of the site conditions.  For example, see our business unit water management planning and actions in the Canadian oil sands.

Produced Water
Oil reservoirs frequently contain large amounts of water, which comes to the surface along with oil and/or natural gas. This water is called produced water, and the volume brought to the surface depends on the flow of oil or natural gas. Produced water is usually highly saline and may contain hydrocarbons, minerals or metals from the reservoir. It also can have low oxygen content and can be relatively high in temperature because of the depths from which it comes. Managing its treatment and disposal is a challenge for the industry, and alternatives are being evaluated as part of the company’s work at our Global Water Sustainability Center (GWSC) and Bartlesville Technology Center
 
Marine Water Management
We carefully manage our marine water discharges. Our tanker operations, which typically move Alaskan crude to U.S. west coast refineries, are certified under the Washington Department of Ecology's Exceptional Compliance Program (ECOPRO). ECOPRO, a voluntary program for tankers and tank barges, recognizes operator commitment to environmental stewardship through compliance with standards exceeding regulatory requirements. Our fleet operations also comply with new vessel water discharge regulations.

As part of the company’s emergency preparedness program, the company conducts drills in both land and marine environments.  Additional information about those drills and our emergency response plans can be reviewed under the Emergency Response and Crisis Management section or the Offshore Incident Prevention and Response Capabilities section of this report.