ConocoPhillips

Climate Change Strategy

Environmental team at work

​Unburnable Carbon

In June 2014, IPIECA — the oil and gas industry association for environmental and social issues of which ConocoPhillips is a member — published a fact sheet on the topic of carbon asset risk titled, “Exploring the concept of 'unburnable carbon.”

The fact sheet makes several key points:

  • The industry agrees with the need to address the challenges of climate change.
    • “…rising GHG emissions and global temperature pose risks to society and ecosystems that are serious enough to warrant cost-effective policy responses that balance mitigation and adaptation, as well as other societal priorities.” 
  • Oil and natural gas are needed to meet increasing energy demand. 
    • In all of the International Energy Agency's scenarios, including their 2-degree scenario titled “450 PPM,” “There is a need for new oil and gas production capacity to accommodate the projected increase in demand and compensate for the decline in production at existing fields.” 
  • There is no clear evidence of a speculative “carbon bubble.” 
    • “Markets are pricing oil and gas companies rationally. This is based on their expectations of future earnings, taking into account the size and type of mineral reserves, the risks arising from future climate policies and many other factors.” 
  • Managing risks is at the core of the oil and gas industry. 
    • “Oil and gas companies manage climate risk alongside other business risks. A number of strategic tools are currently used to manage these risks, including CO2 costs in project economics.”

IPIECA concludes that oil and gas companies, including ConocoPhillips, are taking the necessary steps to build carbon-constrained scenarios into their long-range plans and strategic portfolio decisions.