In early 2021, we established a multi-disciplinary Low Carbon Technologies organization. The organization’s remit is to support our net-zero ambition on Scope 1 and 2 emissions, understand the low-carbon energy landscape and prioritize opportunities for future competitive investment. We are approaching this effort with the same discipline we follow in our traditional business investment and capital allocation process. This includes keeping costs low, leveraging competencies, identifying viable economic opportunities and anticipating and managing risk while focusing on projects with competitive returns potential.  

We are working with organizations in R&D and academia and industry collaborations focused on CCS, renewables, energy efficiency, electrification and hydrogen generation, deployment and transportation to advance low carbon opportunities around the globe.

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Low Carbon Opportunities infographicWe recognize the important role that carbon capture and storage (CCS) and hydrogen could play in decarbonizing the global economy. We intend to apply our disciplined approach to development of these new opportunities through clear investment criteria and a focused strategy. We have prioritized opportunities in these technologies as they offer potential for competitive returns and align closely with our technical competencies and global reach. Since 2021, we have advanced our positions in both technologies, including offering support to drive innovation, described in more detail in the following sections. 

Carbon Capture and Storage

Carbon capture and storage involves capturing CO2  from concentrated sources — such as power plants or industrial sources — preprocessing, compressing, transporting and injecting the CO2  into geologic formations underground and monitoring the storage site. This process helps reduce the amount of CO2  released into the atmosphere.  

ConocoPhillips is leveraging our unique land position, technical expertise, project development skills and safety commitment to evaluate future cost-effective and permanent carbon storage services. We have assembled an internal team of subsurface and surface experts, with support from our Land, Regulatory, Legal, Government Affairs, Commercial, Environmental and Sustainable Development and Stakeholder Relations teams, and are actively engaged in subsurface characterization, business development, appraisal planning and land acquisition. 

CCS hubs should enable access to a diverse source of industrial customers, reducing both the reliance on a single source of CO2 supply and the risk of asset stranding. We are evaluating an opportunity to participate in the creation of a CCS hub for industrial sites along the U.S. Gulf Coast. This hub could offer cost advantages and risk mitigations and can be modified to meet increasing demand. The Gulf Coast’s large, concentrated industrial emissions sources, coupled with significant subsurface storage capacity in Texas and Louisiana, could make it an ideal location for a hub structure. Long-term off-take agreements would need to be signed with industrial emitters who are looking to address their emissions to meet long-term GHG reduction targets, current carbon credits and future possible credits or taxes. 

As part of this work, we identified a 25,000-acre portion of our more than 600,000-acre position in southeast Louisiana as a potential hub for CCS services. The area may be well-suited to serve industrial sites located along the Mississippi River corridor. Additionally, ConocoPhillips is in negotiations with landowners along the Texas and Louisiana Gulf Coast for additional rights to sequester CO2. The team is also negotiating with large industrial customers near the proposed land positions to provide baseload CO2 streams to each of the hubs. 

ConocoPhillips will continue to evaluate development of low-carbon projects, including a CCS project as part of the previously described LNG work with Sempra Infrastructure.  

At ConocoPhillips (U.K.) Teesside Operator Limited, we are collaborating with industry partners and the government to study ongoing joint regional environmental initiatives, including evaluating the ConocoPhillips-operated Teesside Oil Terminal as a site for industrial carbon capture. An engineering study was completed in early 2023, and we remain open to any future opportunities regarding expansion of carbon capture and storage clusters in the area. 

Finally, we are a member of the Pathways Alliance, a group of Canada’s largest oil sands producers working together to address climate change by achieving net-zero operational emissions by 2050. One of the key pathways to achieving net-zero operational emissions is through the proposed foundational project, which includes a carbon capture and storage network to transport captured CO2 from oil sands facilities and sequester it deep underground at a storage hub.

Hydrogen

ConocoPhillips is also evaluating technologies that will enable the cost-effective production of hydrogen. We have identified two types of hydrogen manufacturing for bulk fuel supplies in both hydrogen and ammonia form that have technical and commercial adjacencies with the company’s core competencies and the potential to grow into a scalable business — hydrogen from natural gas with associated CCS (“blue hydrogen”) and hydrogen from the electrolysis of water using electricity from renewables (“green hydrogen”). 

We are evaluating optimum locations for low-cost hydrogen manufacturing as well as the best means to deliver it to market. Success factors for blue hydrogen are a reliable supply of low-cost natural gas and proximity to subsurface sites suitable for CCS. For green hydrogen, the success factors are low-cost supplies of renewable electricity, water and large-scale electrolysis. 

Technologies for manufacturing both blue and green hydrogen are rapidly evolving, and, as with CCS, we are pursuing various ways to access these technologies and qualify them for use.  

Over the last year, we have made early investments in enabling hydrogen technologies. Leveraging our global reach and our technical expertise, we are evaluating and high-grading hydrogen production and marketing opportunities, including ammonia as a hydrogen carrier, both domestically and globally.  

In early 2022, we made an investment to support the development of a novel turquoise hydrogen production technology from Ekona Power Inc., a Vancouver-based hydrogen technology venture. Ekona’s new methane pyrolysis technology platform is expected to produce low-cost hydrogen from methane. The technology converts existing methane streams into hydrogen and solid carbon to reduce CO2 emissions when applied. This investment represents an opportunity to leverage our existing infrastructure and create optionality at the front end of new technologies that will be important to the future of energy. 

In September 2022, Japanese energy company JERA announced a collaboration with ConocoPhillips to evaluate the development of green and blue ammonia from the U.S. Gulf Coast. We are working to facilitate the development of low-carbon ammonia production to accelerate the availability and supply of low-carbon fuels from the U.S. for use in the U.S., Europe, Japan and greater Asia. A project engineering study is underway to evaluate this landmark opportunity.